To get straight to Business, all Ubuntu or Kubuntu versions at least till Gutsy do not run in Live environment. So usually ATi users have had to use the Alternate CD to install Ubuntu in their rig. However it is indeed possible to use the Live CD to run Ubuntu on an ATi based machine, at least it worked on my ASUS M2A-VM with ATi Radeon Integrated graphics. The trick is only to assume that the live CD is just a normal installation which it is in a way and I considered only X to be broken. The solution was simple. When X.org crashes for several times and when the message appears that X will restart itself in 2 minutes.This is the time to act quickly. We have to enter the tty environment  by pressing Ctrl + Alt + F1; In the terminal we execute the command:

sudo dpkg-reconfigure xserver-xorg

After this choose your video card driver as “vesa” and generally accept the default terms and setting as you wish and then finish setting it up. Make sure you do this within the 2 minutes.

Now go back to GUI environment: Ctrl + Alt + F7 and do nothing after that. Wait for few minutes (at least 2 minutes) and the GUI will run by itself. Now you can use the live CD as you please
and you can install Ubuntu as well. You will not need to reconfigure X after installation. But for every live CD session, you need to repeat these steps, period.