Comment 15 for bug 160871

The support offered by the open source ati drivers is incomplete. I know for a fact that dual head does not work on my Mobility Radeon 9000, the most I can do is duplicate to an external monitor/projector what's on the screen, I cannot set true dual head or fiddle with resolutions with that setup.

However, you should be able to control the screen resolution when only your laptop monitor is enabled. The new version of X in Hardy is a little different, so I am still trying to figure out how to effectively tweak it. For those using Gutsy, you could follow this guide to have the correct screen resolution options: http://ubuntuforums.org/showthread.php?t=690760 (be sure to select your max resolution AND everything less). Because of the new version of X, that guide will not work in Hardy since it won't prompt for video driver or screen resolutions.

grahams, the best advice I can offer you right now is to manually edit your xorg.conf.
I will post my xorg.conf since, to my surprise, it did not change from the Gutsy setup during the upgrade to Hardy. Here is the most important excerpt:

Section "Screen"
 Identifier "Default Screen"
 Device "ATI Technologies Inc Radeon R250 [Mobility FireGL 9000]"
 Monitor "Generic Monitor"
 DefaultDepth 24
 SubSection "Display"
  Modes "1400x1050" "1280x1024" "1280x960" "1024x768" "800x600" "640x480"
 EndSubSection
EndSection

You can manually edit xorg.conf, first make a backup

sudo cp /etc/X11/xorg.conf /etc/X11/xorg.conf.bak
gksudo gedit /etc/X11/xorg.conf

After your changes - save and close, log out and log back in, or kill X with CTRL+ALT+BACKSPACE
If you have to recover your xorg.conf from a tty, run

sudo cp /etc/X11/xorg.conf.bak /etc/X11/xorg.conf

or just auto-reconfigure X (which you may consider trying anyway to help solve the problem) with

sudo dpkg-reconfigure xserver-xorg -phigh