Download the installer: ati-driver-installer-8-4-x86.x86_64.run (this installer is for 32bit and 64bit systems)
Follow These Instructions Carefully
Switch to the directory you downloaded this into and the run the following. (Make sure universe and multiverse are enabled in your repository sources).
sudo apt-get update
sudo apt-get install build-essential fakeroot dh-make debhelper debconf libstdc++5 dkms linux-headers-$(uname -r)
This installs the dependencies for the installer.
Using Synaptic, completely remove any packages containing "fglrx" in their name.
If using 64bit make sure to collect package "ia32-libs" and " libGL.so.1" before proceeding!
Remove any old fglrx .debs:
sudo rm /usr/src/fglrx-kernel*.deb
Now use the following command to create the .deb files you will be using for installation:
sudo sh ati-driver-installer-8-4-x86.x86_64.run --buildpkg Ubuntu/hardy
As an alternative, you can just use
sudo ./ati-driver-installer-8-4-x86.x86_64.run --buildpkg Ubuntu --autopkg
Now we have to blacklist the driver in Ubuntu's repository. This is so it doesn't ever overwrite our installation.
sudo gedit /etc/default/linux-restricted-modules-common
Add "fglrx" to the line "DISABLED_MODULES"
Please note that after the modification above, the "Restricted Driver Manager" will signal "ATI accelerated graphics driver" not enabled (unticked). This is perfectly correct. At the end of the installation procedure it will signal in Status: "in use" (green light), but NOT enabled. It simply means that the fglrx module contained in the linux-restricted-modules package is not enabled, but another fglrx module (8.4) is in use.
You may also need to edit the file (if it exists):
sudo gedit /etc/modprobe.d/blacklist-restricted
Put a # in front of the line "blacklist fglrx", if it is present. Otherwise, the kernel module will not load automatically, and you will not get 3D acceleration.
sudo dpkg -i xorg-driver-fglrx_8.476*.deb fglrx-kernel-source_8.476-0*.deb fglrx-amdcccle_8.476-0*.deb
 Additional 64-bit instructions
If you have a 64 bit install, the above dpkg command will likely complain that "Errors were encountered while processing: fglrx-amdcccle". This is because of a dependency of the amdccle package on 32 bit libraries. If you receive this error, issue the following command after the above dpkg command, which will force the installation of all of the 32 bit dependencies, and then the amdccle package:
sudo apt-get install -f
Catalyst 8.4 on 64-bit systems requires the --force-overwrite command in the above dpkg command:
sudo dpkg -i --force-overwrite xorg-driver-fglrx_8.476*.deb fglrx-kernel-source_8.476-0*.deb fglrx-amdcccle_8.476-0*.deb
When installing the packages, if xorg-driver-fglrx_8.476 fails to install due to a diverted file conflict, you can fix the package with this procedure.
 Finishing the Install: Configuration
Now you'll have to edit your xorg.conf
sudo gedit /etc/X11/xorg.conf
and add the following line to the Device section (if it does not already exist):
Save and exit, then run
sudo aticonfig --initial -f
in a terminal. If it does not error you should be fine. Finally, reboot the computer and type
into the terminal. If the vendor string contains ATI, you have installed the driver successfully.
Please note: Depending on the particular ATI card that you own, you may or may not automatically have all of the relevant driver features enabled. R5000 and R600 cards (X1xxx, HD seris, and newer) in particular will need TexturedVideo enabled in Xorg.conf (rather than the traditional VideoOverlay) in order to support Xv accelerated video playback.
 Removing Mesa drivers
If fglrxinfo reports that Indirect rendering by Mesa is in place, even though you have installed ATI driver, check:
* Remove the package xserver-xgl.
Explanation: If you installed this previously in order to make compiz work, it will not allow direct rendering on your display. You can check out if this is what it causing the problem by running
DISPLAY=:0 glxinfo | grep render
If it returns an ATI renderer, it means that xgl is being displayed indirectly on the display 1. (Taken from )
Warning: This might make your compiz stop working as it is configured to use XGl. A solution might be to run the Envy script in order to configure compiz.
Also, if Compiz stopped working due to "Composite" problem, check that
Option "Composite" "Enable"