I was able to figure it out (with help from my uncle).
Apparently the generic ATI driver fails to reset the refresh rate when going back to the cli.
The fix is to install AMD's proprietary driver.
Select and download the appropriate driver.
For me it was:
I was able to restart into the command line and logged on as root.
Then I ran the downloaded file:
Everything installed like a breeze. No problems.
Rebooted (or you can startx or /etc/init.d/kdm start).
Back in business.