X hangs on Ubuntu (gutsy) with latest Ati-fglrx driver

Symptoms:

• X takes 100% cpu after a certain period of inactivity
• mouse cursor moves, but doesn't respond to any clicks
• ctrl+alt+shift+F1 occassionally works (not always)
  

I started having this problem after installing the latest ati-fglrx driver.
My fglrx output:

OpenGL vendor string: ATI Technologies Inc.
OpenGL renderer string: ATI MOBILITY RADEON X300
OpenGL version string: 2.1.7412 Release

Browsed a thousands of forum entries, tried a zillion of solutions. Finally this is what seemed to have fixed the problem for me:

vim /etc/default/acpi-support

# Should we save and restore state using the VESA BIOS Extensions?
SAVE_VBE_STATE=false

# Should we attempt to warm-boot the video hardware on resume?
POST_VIDEO=false

also check http://babilonline.blogspot.com/2008/03/unbuntu-ati-proprietary-fglrx-driver.html

Unbuntu ATI proprietary fglrx driver logout/shutdown problem

I was annoyed to hell with this problem. It seems the problem was with atieventsd. Removing it from startup solves the problem:

update-rc.d -f atieventsd remove

atieventsd:: The ATI External Events Daemon atieventsd is a user-level application that monitors various system events such as ACPI or hotplug, then notifies the driver via the X extensions interface that the event has occurred.