Which version of Ubuntu are you using ? If you're using 10.04 then there's a problem related to the vga arbiter code that was added in 10.04. The configuration you want (what we call Multiview) works with 9.10 but not with 10.04 unless you apply a workaround.
The bug is covered in the Bugzilla tracker at http://ati.cchtml.com -- I'll see if I can find the ticket with the workaround info.
EDIT -- ticket #1828