I did some testing, and came up with this:
1. If I boot normally, the login window does not show up at all, and the system 
reboots itself or lock up, with a black screen, and the cursor stuck at the top 
left corner, not blinking. The same thing happens with every driver (ati, 
radeonhd etc) driver.
2. If I go to recovery mode, and Resume right away, the system boots. So far I 
have tested radeonhd only. From the boot messages I saw, the only difference 
was that during the recovery mode, a message Saving VESA state showed up.

Any clue?

I'll install on a separate partition this weekend, since I havent
downloaded the entire iso image.

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[hardy] DRI not working with fglrx
https://bugs.launchpad.net/bugs/199359
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