xorg server crashes with flgrx and dual monitors

The ATI flgrx driver and everything else works perfectly when there's only a single monitor setup.

Attempting to setup 2 monitors (with either "aticonfig" or Catalyst) causes glesx.so to crash with a floating point exception.

If glesx.so is renamed (so X can't find it) both monitors start and it looks like it works - 2 gnome desktops (I didn't enable xinerama), menus, etc; but moving the mouse pointer towards the edge of the first screen or starting applications causes X to crash hard (computer locks up, no keyboard response, power button doesn't reboot unless you hold it for 5 seconds and risk filesystem corruption).

For this second bug (with glesx.so renamed) the end of "Xorg.0.log" says:

[mi] EQ overflowing. The server is probably stuck in an infinite loop.

Backtrace:
0: /usr/bin/X (xorg_backtrace+0x28) [0x4a3248]
1: /usr/bin/X (mieqEnqueue+0x1f4) [0x4a2ac4]
2: /usr/bin/X (xf86PostMotionEventP+0xc4) [0x47cea4]
3: /usr/lib/xorg/modules/input/evdev_drv.so (0x7f6f5efca000+0x53cf) [0x7f6f5efcf3cf]
4: /usr/bin/X (0x400000+0x6fca7) [0x46fca7]
5: /usr/bin/X (0x400000+0x11d1f3) [0x51d1f3]
6: /lib/libpthread.so.0 (0x7f6f686cc000+0xf8f0) [0x7f6f686db8f0]
7: /lib/libc.so.6 (ioctl+0x7) [0x7f6f67484157]
8: /usr/lib/fglrx/libatiuki.so.1 (ukiGetLock+0x7b) [0x7f6f64e928bb]
9: /usr/lib/xorg/extra-modules/modules/drivers/fglrx_drv.so (swlDriLock+0x80) [0x7f6f65334260]
10: /usr/lib/xorg/extra-modules/modules/drivers/fglrx_drv.so (swlDriDoWakeupHandler+0x40) [0x7f6f65333790]
11: /usr/lib/xorg/extra-modules/modules/drivers/fglrx_drv.so (0x7f6f650a5000+0x27a62a) [0x7f6f6531f62a]
12: /usr/lib/xorg/extra-modules/modules/drivers/fglrx_drv.so (swlDriWakeupHandler+0x74) [0x7f6f653336c4]
13: /usr/bin/X (WakeupHandler+0x4b) [0x435f2b]
14: /usr/bin/X (WaitForSomething+0x1d7) [0x45f997]
15: /usr/bin/X (0x400000+0x30952) [0x430952]
16: /usr/bin/X (0x400000+0x261aa) [0x4261aa]
17: /lib/libc.so.6 (__libc_start_main+0xfd) [0x7f6f673c4c4d]
18: /usr/bin/X (0x400000+0x25d59) [0x425d59]

ProblemType: Bug
DistroRelease: Ubuntu 10.04
Package: xserver-xorg-core 2:1.7.6-2ubuntu7
ProcVersionSignature: Ubuntu 2.6.32-21.32-generic 2.6.32.11+drm33.2
Uname: Linux 2.6.32-21-generic x86_64
NonfreeKernelModules: fglrx
Architecture: amd64
Date: Sun May 2 15:11:52 2010
DkmsStatus: fglrx, 8.723.1, 2.6.32-21-generic, x86_64: installed
InstallationMedia: Ubuntu 10.04 LTS "Lucid Lynx" - Release amd64 (20100427.1)
MachineType: Intel Corporation S5520SC
ProcCmdLine: root=/dev/md1 ro text
ProcEnviron:
 LANG=en_AU.UTF-8
 SHELL=/bin/bash
SourcePackage: xorg-server
dmi.bios.date: 06/01/2009
dmi.bios.vendor: Intel Corp.
dmi.bios.version: S5500.86B.01.00.0038.060120091503
dmi.board.asset.tag: ....................
dmi.board.name: S5520SC
dmi.board.vendor: Intel Corporation
dmi.board.version: FRU Ver 0.05
dmi.chassis.asset.tag: ....................
dmi.chassis.type: 17
dmi.chassis.vendor: ..............................
dmi.chassis.version: ..................
dmi.modalias: dmi:bvnIntelCorp.:bvrS5500.86B.01.00.0038.060120091503:bd06/01/2009:svnIntelCorporation:pnS5520SC:pvr....................:rvnIntelCorporation:rnS5520SC:rvrFRUVer0.05:cvn..............................:ct17:cvr..................:
dmi.product.name: S5520SC
dmi.product.version: ....................
dmi.sys.vendor: Intel Corporation
glxinfo: Error: [Errno 2] No such file or directory
system:
 distro: Ubuntu
 codename: lucid
 architecture: x86_64
 kernel: 2.6.32-21-generic
xdpyinfo: Error: [Errno 2] No such file or directory