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Did you mess up your xorg.conf file? (/etc/X11/xorg.conf)
I think ubuntu has a command to regenerate that file if it is configured wrong. It sounds like you have a video driver problem, but I'm not sure.  I don't know what ubuntu's 'recovery mode' is (gentoo doesn't have one..you just boot into the command prompt with no X if you have problems) - does it give you a gui? Is the gui really slow and laggy? What did you upgrade from?

ATI cards can be really finicky at times with linux. You might want to also try asking in the official ubuntu forums.