[whych]

I have found that radeons and kvm's don't go well together.
Try booting into single user mode (type 3 on the grub bootup screen) and then log in as root.
Now type: /usr/bin/aticonfig --initial or /usr/X11R6/bin/aticonfig --initial.
Now run sax2 to set up the card.
I have also found that setting the vga= line in the bootup to vga=0x31a gives a 1280x1024 boot up and makes it easier to sync the monitor.