I recently upgraded xubuntu 12.04 to 12.10 on 2 laptops. Video on the one with Intel integrated graphics works fine.

On the one with ATI/AMD graphics Vlc works properly but smplayer does not work unless I select the x11 module, which it did not do before. With other modules either mplayer crashes or I get audio but no video depending upon the selected o/p module.

If I go into Settings Manager and click AMD Catalyst Control Center (non-admin) I get:

Initialization error

There was a problem initializing Catalyst Control Center Linux edition. It could be caused by the following.

No AMD graphics driver is installed, or the AMD driver is not functioning properly.
Please install the AMD driver appropriate for you AMD hardware, or configure using aticonfig.
I got the same error message when I ran:
gksudo amdcccle
Tried this thread:
but it doesn't seem to have 12.10 specific information.

Here's a little more information:

$ lspci | grep VGA
01:05.0 VGA compatible controller: Advanced Micro Devices [AMD] nee ATI RS880M [Mobility Radeon HD 4200 Series]
$ cat /etc/X11/xorg.conf

Section "Screen"
Identifier "Default Screen"
DefaultDepth 24
EndSection

Section "Module"
Load "glx"
EndSection
Under Ubuntu 12.04 (which I replaced with xubuntu 12.04 by just reinstalling) on this machine I got a proprietary video driver listed but I never installed it. Under xubuntu 12.10 this driver doesn't appear at all in the update manager section.

Perhaps I should be glad I never installed it before ... are there compatibility issues in 12.10?

I downloaded the linux 64 bit installer: AMD Catalyst™ 12.6 Proprietary Linux x86 Display Driver from the amd site but needless to say I haven't installed it yet.