Yes, absolutely, that lock-up is not a nice welcome to Ubuntu.
Unfortunately we are fumbling in the dark with this AGP setting, and
several tries have been made to fix it, but it's always broken for
_some_ people. "Other distros" probably use the older version, like the
one in 7.04. Can you please attach the log from 7.04? Or, install the
old .deb from 7.04 and see if it works without any options in xorg.conf.

And the resolution detection seems certainly broken. ddc does not return
1440x900 so I am not sure why that was chosen, maybe it just fits with
the frequency ranges and such. I have filed a bug upstream for this:
https://bugs.freedesktop.org/show_bug.cgi?id=15526

** Also affects: xserver-xorg-driver-ati via
   https://bugs.freedesktop.org/show_bug.cgi?id=15526
   Importance: Unknown
       Status: Unknown

-- 
Freeze with ati driver during boot on 8.04
https://bugs.launchpad.net/bugs/214105
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