Seems your case is special. Your graphics card is based on the R100 chip. The proprietary ATI Linux driver only supports the R200 chip and up. You're only option is to use the opensource radeon driver. This driver should already be included in your Ubuntu 8.10 installation.
Make a copy of /etc/X11/xorg.conf (for backup, in case something goes wrong) and edit to have the file look like this:
Identifier "Configured Video Device"
Boardname "ATI Radeon"
Right now the "Driver" property should say "vesa" or something.
Restart X (press CTRL + ALT + BKSPC) or simply restart your machine. You should now have the the correct driver for your ATI card. If you're lucky your resolution should have changed automatically. If not, go to system>administration>screen resolution.
Hope that works.
Regarding the automounting of CDs, take a look at this:
It basically says that you need the gnome-volume-manager (In case you are using GNOME as desktop environment).