Ok... well... finished adding support just recently, and expect that upgrading isn't getting it done.
First of all... do yourself a favor and ssh into this thing on the internal network. Then you don't have to squint through lines like you are trying to see boobs on scrambled cable. You can also copy and paste all this stuff.
apt-cache policy fglrx | grep stall
If fglrx installed version does not read 2:9.002-0ubuntu1 OR
if uname -r does not read 2.6.38-16-generic (or -generic-pae)
You are going to want to do the following...
apt-get -y remove --purge fglrx* --force-yes
apt-get -y install --reinstall libgl1-mesa-glx libgl1-mesa-dri --force-yes
apt-get -y install --reinstall xserver-xorg-core --force-yes
It will then upgrade your kernel (could take a while... you can press esc at the penguin load screen to see what it is doing), reboot, put you on the ati driver we like, reboot, and drop you at avwizard.