You were right! I hade this between my third party sources:
http://ppa.launchpad.net/bdrung/backports/ubuntu
I don't really remember putting this one on the list.
Thanks a lot! Sorry for invalid bug.
** Changed in: xserver-xorg-video-ati (Ubuntu)
Status: Incomplete => Invalid
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karmic ati driver installed for jaunty and it's broken
https://bugs.launchpad.net/bugs/389547
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