In ubuntu you can choose between two methods of installing the proprietary ATI driver, install it from repo or manually. Here, I would to share with you step by step on how to install the very latest driver version. (the old driver is kinda buggy for thinkpad).

1. As ubuntu’s linux-restricted-modules package includes the fglrx module from an old driver version (8.25.18), we have to blacklist this module to make sure the new kernel module which is needed by the new driver will be used instead.

   sudo gedit /etc/default/linux-restricted-modules-common
   DISABLED_MODULES="fglrx"

2. Download the ATI Driver. (8.32.5)
3. Install necessary tools:

   sudo apt-get install module-assistant build-essential
   sudo apt-get install fakeroot dh-make debconf libstdc++5 linux-headers-$(uname -r)

4. Create .deb package

   bash ati-driver-installer-8.29.6.run --buildpkg Ubuntu/dapper

5. Install .deb package

   sudo dpkg -i xorg-driver-fglrx_8.32.5-1_i386.deb
   sudo dpkg -i fglrx-kernel-source_8.32.5-1_i386.deb
   sudo dpkg -i fglrx-control_8.32.5-1_i386.deb

6. Remove any old fglrx debs from /usr/src:

   sudo rm /usr/src/fglrx*.deb

7. Compile the kernel:

   sudo module-assistant prepare
   sudo module-assistant update
   sudo module-assistant build fglrx
   sudo module-assistant install fglrx
   sudo depmod -a

8. Update the Xorg file:

   sudo aticonfig --initial
   sudo aticonfig --overlay-type=Xv

9. Reboot:

   sudo shutdown -r now

10. Confirm it works:

    $ fglrxinfo
    display: :0.0  screen: 0
    OpenGL vendor string: ATI Technologies Inc.
    OpenGL renderer string: RADEON 9700 Generic
    OpenGL version string: 2.0.6065 (8.35.2)

    $ glxinfo | grep render
    direct rendering: Yes

You’re done! It works like a charm for me. Hope it works for you too. Let me know if it doesn’t work for you. Ubuntu Rox!