I haven't had problems with that particular card, but I have had a lot of problems with the ATI proprietary drivers and newer kernels.
A lot of the times it's the kernel module that uses system calls that are either obsolete, missing or basically just different.
I personally couldn't fix my problem, but the most information I got was from the install path of the module. I think the installer places everything under:
There you can find logs for the kernel module compilation and what error it gave.
I think the x86_64 Ubuntu has a working package with a patch for the newest driver, so you might want to look into that.
Hope that helps.