It worked for me.
I changed the file xorg.conf so it said:
Section "Screen"
Identifier "Default Screen"
Monitor "Configured Monitor"
Device "Configured Video Device"
Defaultdepth 24
SubSection "Display"
Modes "1280x800"
EndSubSection
EndSection
Section "Module"
Load "glx"
EndSection
Section "Extensions"
Option "Composite" "1"
EndSection
Make sure "Composite" is set to "1" in case you get the error message
"The Composite extension is not available".
However, now I have the strange thing that my system hangs at the Ubuntu
progress bar, unless I keep pressing some keys and/or touching the
mousepad, otherwise it won't boot...
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Ubuntu 8.04 alpha 4 - restricted driver (ATI) causes low graphics mode and
touchpad double click error
https://bugs.launchpad.net/bugs/192702
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