Today I upgraded 3 machines to Natty. Two of them have ATI Radeon 5000 series graphics card, and after the upgrade on both, the reboot came up as a totally blank screen (Sony Vaio VPC EA series) and appeared to completely hang (Acer M5811 Desktop PC with ATI 5450 card).
Sony Vaio Install
I learnt on the Sony! (my wife’s laptop) 
The actual natty install went well, but on reboot the screen was blank. I heard the login screen come up though, so it sounded as if everything went OK.
At the same time the fan was *very* *very* noisy. This laptop never really stops the fan as far as I can see, but this sounded like it was taking off.
Some posts recommend adding some flags to grub:
GRUB_CMDLINE_LINUX_DEFAULT="nomodeset osi_acpi=linux "
for the noisy fan.
I had previously set up ssh on the laptop, so ssh’d in and tried this. Rebooted – still noisy, still a blank screen. (yes – I ran update-grub).
I tried the directions in the Natty installation guide
apt-get remove --purge fglrx fglrx_* fglrx-amdcccle* fglrx-dev* xorg-driver-fglrx
apt-get remove --purge xserver-xorg-video-ati xserver-xorg-video-radeon
apt-get install xserver-xorg-video-ati
apt-get install --reinstall libgl1-mesa-glx libgl1-mesa-dri xserver-xorg-core
mv /etc/X11/xorg.conf /etc/X11/xorg.conf.backup
Then using synaptic installed the fglrx-modaliases package. Rebooted – this worked. I.e., I had plymouth up and could log in. No acceleration though.
Next I followed the “Restricted Drivers Manager” section -went to System/Administration/Additional Drivers in the menus and activated FGLRX drivers. Reboot. Same blank screen.
Then I read this post:
http://eternalthinker.blogspot.com/2010/10/troubleshooting-sony-vaio-overheating.html
Went to AMD website, support.amd.com:
http://support.amd.com/us/Pages/AMDSupportHub.aspx
and in the download drivers section, selected Notebook Graphics/Radeon HD Series/MobilityRadeon HD 5xxxSeries//Linux X86
Downloaded the file and ran it, followed by the command which sets up the xorg.conf:
sh ati-driver-installer-11-6-x86.x86_64.run
aticonfig --initial -f
Rebooted. THIS WORKED.
As an aside, it also fixed the noisy fan (fixed is a relative term for Sony laptops I think – still quite loud).
Acer Desktop
When I did the Acer desktop, I thought I would be smart and install the ATI driver before upgrading to Natty. This made no difference.
On reboot after the natty upgrade the machine was dead (the three-fingered Vulcan salute didn’t work, network interface was dead so no ssh fun for me).
Rebooted and held the SHIFT key to get a grub menu. Then went into the recovery menu item, and booted from there. This gave me a usable machine. I then used the same ATI Radeon download as I used for the Sony (see above) and then ran
aticonfig --initial -f
Before logging out, I also edited /etc/default/grub and added this:
GRUB_CMDLINE_LINUX_DEFAULT="splash nomodeset"
Did update-grub and rebooted. Success.
Hope this helps someone else.