Could you please recheck it with latest Ubuntu Gutsy Gibbon 7.10 or the Live CD?
If it doesn't help please post the output of lspci, xrandr and the file
/etc/X11/xorg.conf.
** Changed in: xorg (Ubuntu)
Status: New => Incomplete
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poor output quality on external projector + Fn key issue
https://bugs.launchpad.net/bugs/102939
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