Comment 52 for bug 1310489

@Abhijit: I don't think the xorg.conf that gpu-manager generates is causing your problem (I don't see anything wrong in the X log) but let's see what happens when the gpu-manager is disabled. Please follow these steps:

1) sudo nano -w /etc/default/grub

2) Add "nogpumanager" in the following line (within the quotation marks)
e.g. if you have this line:
GRUB_CMDLINE_LINUX_DEFAULT="quiet splash"
it should look like this:
GRUB_CMDLINE_LINUX_DEFAULT="quiet splash nogpumanager"

3) Press CTRL+X to save and exit

4) sudo update-grub

5) Reboot

6) Make sure that the following command returns true:
grep nogpumanager /proc/cmdline && echo true || echo false

7) If it returns true, regenerate the xorg.conf
sudo aticonfig --adapter=all --initial

8) Reboot and see if it all works (attach your /var/log/Xorg.0.log and /etc/X11/xorg.conf)