Sorry it took me awhile to get back to this thread, I inevitably solved the issue and decided I was due for some much needed sleep. Ultimately my solution was like this.
First I purged all fglrx drivers by this method found in the ubuntu wiki
I deleted /etc/X11/xorg.conf, then rebooted my computer to make sure everything was cleaned up. I then installed the proprietary drivers from the repositories. After I installed these drivers but BEFORE I rebooted my system I typed the following into the terminal.
sudo /usr/share/ati/fglrx-uninstall.sh # (if it exists)
sudo apt-get remove --purge fglrx*
sudo apt-get remove --purge xserver-xorg-video-ati xserver-xorg-video-radeon
sudo apt-get install xserver-xorg-video-ati
sudo apt-get install --reinstall libgl1-mesa-glx libgl1-mesa-dri xserver-xorg-core
sudo dpkg-reconfigure xserver-xorg
Once my system came back up everything has been working great since. I also do not experience this "slow" performance in 3D people are talking about.
sudo aticonfig --initial -f
sudo aticonfig --acpi-services=off
TLR Use the drivers from the repositories not the drivers from ATI.com... and make sure you aticonfig properly.