I encountered a well-known bug (except to ATI because they go out of their way to prevent you from filing bugs against fglrx). When I run my Acer Travelmate 8100 dual-headed with Ubuntu Edgy Eft (aka 6.10). The cursor on the external screen is not displayed correctly. Instead there is a large block of random garbage.

Putting "fglrx" in /etc/modules was not needed, nor was linking /usr/lib/xorg/modules/dri to /usr/lib/dri. The solution was to disable the "Composite" extension as suggested by the X.org logfile.

See the Ubuntu Edgy Installation Guide in the Unofficial Wiki for the ATI Linux Driver.