Things are definitely different in the xorg.conf for 8.04, there is definitely a driver issue here. KDE starts up like a charm, I hadn't used it, yet -- nice. I found out I could rotate my monitor if I want (cool).
What is your video card?
At the terminal, type:
You should have a bunch of lines that looks like this:
description: VGA compatible controller
product: 82945G/GZ Integrated Graphics Controller
vendor: Intel Corporation
physical id: 2
bus info: pci@0000:00:02.0
width: 32 bits
capabilities: msi pm vga_controller bus_master cap_list
This is a fishing trip, still checking things out here.