I have a similar situation. Fresh install from the 8.04 dvd. My Device
section in xorg.conf is blank (so I guess it's using the framebuffer?)
Shouldn't the installer autodetect the proper video card?

[EMAIL PROTECTED]:/etc/X11$ lspci -v | grep VGA
01:00.0 VGA compatible controller: ATI Technologies Inc Radeon Mobility M6 LY 
(prog-if 00 [VGA controller])
        Flags: bus master, VGA palette snoop, stepping, 66MHz, medium devsel, 
latency 32, IRQ 11

pertinent part of xorg.conf
Section "Device"
        Identifier      "Configured Video Device"
EndSection

Section "Monitor"
        Identifier      "Configured Monitor"
EndSection

Section "Screen"
        Identifier      "Default Screen"
        Monitor         "Configured Monitor"
        Device          "Configured Video Device"
EndSection

attached is my xorg.log


** Attachment added: "Xorg.0.log"
   http://launchpadlibrarian.net/14550470/Xorg.0.log

-- 
Hardy: Graphics driver "not in use"
https://bugs.launchpad.net/bugs/224130
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