I finished installing 12.10 finally, but I had to use the drivers included in the ubuntu repos. I could not use the latest driver on the AMD website.
What I did to make it work:
Uninstall any AMD driver I had installed up to now.
Install the kernel headers.
Install the driver from the Software Sources app. (Search for 'soft' in the Unity Lens). Under the Additional Drivers tab, select the 'fglrx-updates' (last one) driver.
sudo apt-get install linux-headers-generic
Reboot and everything was working for me.
For good measure I also installed the VAAPI for video acceleration.
Hope this helps.
sudo apt-get install xvba-va-driver libva-glx1 libva-egl1 vainfo