Created attachment 296 [details]
Output from "/usr/share/fglrx/atigetsysteminfo.sh"

Description of problem: 
On a desktop PC running Ubuntu 11.10, the first login after bootup is successful.
After logout, all attempts to login as any user fail: The lightdm login screen is not removed, and the graphical session freezes.
Switch to a text terminal (ctrl+alt+[1-6]) & text login work OK.  "ps -ef" shows the processes from the original graphical login session, starting from "/usr/bin/gnome-keyring-daemon --daemonize --login" [parent process "/sbin/init"] and "/usr/bin/gnome-session --session=ubuntu" [parent process "lightdm"] are still running.
As the problem does not happen on an EeePC, also running Ubuntu 11.10, I assume the problem is with the GPU driver.

Steps to reproduce:
1. Boot the PC;
2. Login as any user, at the lightdm screen;
3. Log out;
4. Login as any user [same or different to that in 1].

Actual result: 
1. Lightdm login screen is displayed;
2. First login is successful;
3. User screen removed, lightdm login screen is displayed;
4. Login screen does not change.

Expected result:
1-3. As above;
4. Expect successful login.

Note: 
1) Most user accounts on the machines have uid less than 1000 [to allow NFS access to a NAS box].  This gives minor niggles in Unity [user ID at top right shows as "[Invalid UTF-8]", but has no apparent effect on the first login.
2) Problem occurs with default and "2D" logins.