Think your DRI device might not be accessible? Check your xorg.conf file has the DRI stanza you can see at the end of mine (I think this was my working xorg.conf when I was trying to use the inbuilt ATI video in my system). To test your system you will need to start up in single user mode so LMCE is not running- you can boot up into Grub, press ESC during the 3 seconds after boot when grub appears. Then press "e" to edit, go to the line that starts with "kernel", press "e" to edit this line and append "single" to the end of the line, then press "b" for boot. You should find yourself booted into a terminal. Now you can reconfigure X without grpahics running.
Use this to test your graphics (running from memory again this was how I did it)
/etc/init.d/kdm start
My xorg.conf file, you should only have to change screen resolution and graphics card PCI bus address (and in fact I think you can put # to comment out that line in the Device stanza that starts with BusID and it still works, think it defaults to 1st card it finds).
Section "ServerLayout"
Identifier "XFree86 Configured"
Screen 0 "aticonfig-Screen[0]-0" 0 0
InputDevice "Mouse0" "CorePointer"
InputDevice "Keyboard0" "CoreKeyboard"
EndSection
Section "Files"
RgbPath "/usr/X11R6/lib/X11/rgb"
ModulePath "/usr/lib/xorg/modules"
FontPath "/usr/share/fonts/X11"
FontPath "/usr/X11R6/lib/X11/fonts/misc/"
FontPath "/usr/X11R6/lib/X11/fonts/Speedo/"
FontPath "/usr/X11R6/lib/X11/fonts/Type1/"
FontPath "/usr/X11R6/lib/X11/fonts/CID/"
FontPath "/usr/X11R6/lib/X11/fonts/75dpi/"
FontPath "/usr/X11R6/lib/X11/fonts/100dpi/"
EndSection
Section "Module"
Load "dbe"
Load "extmod"
Load "record"
Load "xtrap"
Load "speedo"
Load "type1"
Load "glx"
Load "int10"
Load "v4l"
Load "dri"
EndSection
Section "ServerFlags"
Option "AllowMouseOpenFail" "true"
Option "BlankTime" "0"
Option "StandbyTime" "0"
Option "SuspendTime" "0"
Option "OffTime" "0"
Option "AIGLX" "Off"
EndSection
Section "InputDevice"
Identifier "Keyboard0"
Driver "keyboard"
Option "XkbLayout" "us"
Option "XkbVariant" "basic"
Option "XkbModel" "pc105"
EndSection
Section "InputDevice"
Identifier "Mouse0"
Driver "mouse"
Option "Protocol" "auto"
Option "Device" "/dev/input/mice"
Option "ZAxisMapping" "4 5"
EndSection
Section "Monitor"
Identifier "aticonfig-Monitor[0]-0"
Option "VendorName" "ATI Proprietary Driver"
Option "ModelName" "Generic Autodetecting Monitor"
Option "DPMS" "true"
EndSection
Section "Device"
Identifier "aticonfig-Device[0]-0"
Driver "fglrx"
BusID "PCI:1:5:0"
Option "VideoOverlay" "on"
Option "OpenGLOVerlay" "off"
EndSection
Section "Screen"
Identifier "aticonfig-Screen[0]-0"
Device "aticonfig-Device[0]-0"
Monitor "aticonfig-Monitor[0]-0"
DefaultDepth 24
SubSection "Display"
Viewport 0 0
Depth 24
EndSubSection
EndSection
Section "Extensions"
Option "Composite" "false"
Option "RENDER" "true"
EndSection
Section "dri"
Mode 0666
EndSection