Deano: you are a smart man. This could be it!
But…I’m not 100% sure though…, because the HDMI cable works fine in windows…
How can we figure out if this is the issue? I’ll gladly test the theory. just tell me what commands I need to run to test this?
Edit: When I now use the VGA cable, KDE and KDM system have given me new settings for everyrthing. The account you create at installation has now been reset to default settings. I also had problems with audio. I now play with Amarok and enjoys music with no distortion. The audio seems even better than in windows!! This is very cool. 
But…I’m not 100% sure though…, because the HDMI cable works fine in windows…
How can we figure out if this is the issue? I’ll gladly test the theory. just tell me what commands I need to run to test this?
It was just an idea, although I would say that if it works in windows, that effectively discounts this possibility.
There are many options which can be set via aticonfig:
aticonfig --help
This will get a list of outputs available for your card:
aticonfig --list-adapters
However, I’m not familiar with DVI ouptuts (with laptops), so I can’t offer specific advice. You’ll need to google for more info about this. A quick search suggests it has been problematic for others with VGA and DVI ports.