Comment 20 for bug 542660

I had the same problem on my iMac 27" but found a workaround for me:
* installed Ubuntu 10.04 (32 bit) with the text based installer (alternate-i386 CD)
* select the recovery mode and added "radeon.modeset=0 nomodeset" to the boot options (the line with linux ...)
* the recovery mode detected problems with the graphics and allowed me to use failsafe graphics for one session
* install the proprietary driver from ATI
* normal reboot: success.

i didn't really check if everything works, i think i still need some time to get all the hardware working, but at least i managed to log in and write this post :p

good luck