when i play a game (both 2D or 3D) in windowed mode the screen flickers with black bars. And when i play fullscreen after a few mins of play the screen locks up completely. I have an ATI 4870 with ubuntu proprietary drivers activated. What should i do?

You might try the radeonhd driver instead. It improved things for my netbook and does have acceleration support.

I did try the latest AMD Radeon HD 4800 series drivers. Its much better now, no more stuttering in windowed mode. However, i still experience occasional lockups in full screen.

You might want to look at the kernel messages. Also run a memory check. It sounds like it might be buggy acpi support by the mobo. If the card has an external power connector, make sure it is snug.

Well i passed memtest and i know its plugged in tight (and i have sufficient power). Not sure how to check kernel messages, and not sure about acpi support. I have an AMD 790X Gigabyte motherboard, i did have to manually install K10 temp sensors to detect my CPU temps.

You can run "dmesg" to see boot up messages. You can read the other kernel messages with "sudo less /var/log/messages". If it happens again, let it set a while before rebooting. Note the time. I think could be your kernel that is crashing. If you are totally locked out, you can try ssh'ing into the machine from another computer. If you can do that then it isn't a kernel crash, and you can read your logs while the problem is occurring.

Ok i ran dmesg but im not sure what im looking for. So ill paste the output here.

I dont think i get totally locked out because i can still get to the command-line via CTRL+ALT F1 and do "reboot". I havent tried to do much more than that. I may even be able to kill the process. I should also add im using Compiz Fusion effects and animation (cube and wavy windows ect.)I noticed that even in windowed mode im getting lockups, but only in more intensive 3D games which use OpenGL (i think) like Assault Cube. In windowed mode i can kill it easily without knowing the process ID (using the "Force Quit" applet). I noticed in games like that my CPU usage is quite low (compared to 2D games) so im assuming my GPU is being much more utalized, maybe i should check my GPU temps or load, how would i go about getting the temp to show on my sensors applet?

After many crashes i decided the problem was most likely something to do with GNOME+compiz+ATI driver. So i decided to try out Xubuntu 9.10_amd64 which as you know does not use GNOME. So far i have no issues in either full screen or window mode, i was able to play assault cube without a hitch for over 3 hours. I must say, XFCE is an amazing desktop environment, looks great, simple, great config options, and most important its incredibly fast (makes GNOME look like a Pentium 4), not to mention its actually stable now.