Thank you for the replies. Your solutions didnt fix my problem but it put me on the right track. I tried configuring various resolutions in xorg.conf but nothing worked. I then unplugged my second monitor (I should have mentioned 2 screens before, sorry) and tried the live cd - everything worked. I've never had any problems with the same setup using (K)Ubuntu 6.06 so Im not sure what has changed in the 6.10 version.
Just for info sake I have a 19" wide screen LCD connected to the DVI output and a 17" LCD to the VGA. I will keep working on getting the dual screen setup up and running but at least I have the imidiate problem fixed