OK so I re-installed the proprietary drivers using --initial=dual-head.
Here's more details on how I did this (used slightly modified instructions from that above website)
1. Ensured I had all the necessary packages:
1. Downloaded download ati-driver-installer-9-7-x86.x86_64.run to /usr/local/src/ati/9.7.
sudo apt-get install build-essential cdbs fakeroot dh-make debhelper debconf libstdc++5 dkms
2. Built the distro specific packages (deb) for Ubuntu:
3. Now I had all the debs ready for install. I don't care about the dev package though:
sh ati-driver-installer-9-7-x86.x86_64.run --buildpkg Ubuntu/jaunty
4. Now install the remaining debs
sudo mkdir dev
sudo mv xorg-driver-fglrx-dev_*.deb dev
5. This was successful, yay!
6. My previous xorg.conf was for the open source radeon drivers, so I modified it to the basic possible configuration:
7. Then I ran:
Identifier "Configured Screen Device"
Device "Configured Video Device"
Identifier "Configured Video Device"
Option "DontZap" "False"
sudo aticonfig --initial=dual-head -f
The system rebooted without crash. When I logged in however, the "dual head" configuration wasn't really right. It seemed like it had two separate X sessions, one for monitor. compiz desktop effects however DID work. When I moved the mouse across, it would behave strangely and jump around. This isn't what I wanted, I want "big desktop" mode, where you can drag windows between the two monitors.
1. Fire up AMD Catalyst Control Center:
Again, I'll reiterate. Under the "Display Manager", in the "Multi-Display" tab, "Display Configuration". I'm expecting to see an option in the drop down box called "Big Desktop", but it's not there. The only options for "Multi-Display" are "Single (Independent Display)" and "Unknown". :-(
2. Under "Display Options" I tried Xinerama, but it's really buggered. After a reboot, i can *almost* drag windows across, but they don't quite use the enter "secondary" screen... it's buggered. Since enabling xinerama, compiz no longer works.
This is the xorg.conf that aticonfig generated for me: http://pastebin.com/f7f6f5981