Disabling KMS worked, although I needed to provide my own xorg.conf
file. (Otherwise, the screen goes crazy)

For those who are trying to fix this issue on their own computer, here's
what I put in /etc/modprobe.d/radeon-kms.conf :

options radeon modeset=0


I attached the xorg.conf file I'm currently using.

** Attachment added: "The xorg.conf file that I'm using now that I have KMS off 
for the radeon card."
   http://launchpadlibrarian.net/46313178/xorg.conf

-- 
Software Rasterizer used on PowerPC system with Radeon card after Lucid upgrade
https://bugs.launchpad.net/bugs/570228
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