EDIT: ATI Radeon X1400 seems to work fine again since Ubuntu 11.04.
There is another fix to the “well known” issues with the ATI Radeon X1400 and Ubuntu 10.04 to 10.10 besides the one posted about one year ago (see here).
The previous fix kept the graphics card working normally but harmed the overall operating system’s stability, so here is another fix based on disabling all 3D features of the device to get rid of the flickering screen.
It’s up to you to choose what you are able to live without
a) The desktop settings panel and “Segmentation fault” errors now and then, or
b) 3D acceleration (does not harm video playback or any other basic OS functionalities)
For solution a) see this.
For b) create this file:
/etc/modprobe.d/radeon-kms.conf — and add following content
options radeon modeset=0
Solution found here (in German).