By "enabling" you installed the driver by hand and not with the driver
manager? Looking at the log it seems that it's still using the free
driver. It should work though, and if you like to debug it further you
need to purge the fgrlx driver and try the ati driver from here:

https://wiki.ubuntu.com/XorgOnTheEdge

** Changed in: xorg (Ubuntu)
       Status: New => Incomplete

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Rebooting After enabling fglrx and display goes white in Hardy
https://bugs.launchpad.net/bugs/188725
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