Radeon HD 3650 graphics problem

I am trying to work on a machine that has openSUSE 11.1 installed on it and the graphic card is a Radeon HD 3650. With the open source Radeon HD driver X fails to start, because of this I installed the ATI driver from the ATI repo and the xorg.conf file is messed up.

# /.../
# SaX generated X11 config file
# Created on: 2009-02-26T14:10:14-0500.
#
# Version: 8.1
# Contact: Marcus Schaefer <sax@suse.de>, 2005
# Contact: SaX-User list <https://lists.berlios.de/mailman/listinfo/sax-users>
#
# Automatically generated by [ISaX] (8.1)
# PLEASE DO NOT EDIT THIS FILE!
#

Section "ServerLayout"
	Identifier     "Layout[all]"
	Screen      0  "aticonfig-Screen[0]-0" 0 0
	InputDevice    "Keyboard[0]" "CoreKeyboard"
	InputDevice    "Mouse[1]" "CorePointer"
	InputDevice    "Mouse[5]" "SendCoreEvents"
	Option	    "Clone" "off"
	Option	    "Xinerama" "off"
EndSection

Section "Files"
	InputDevices   "/dev/gpmdata"
	InputDevices   "/dev/input/mice"
	FontPath     "/usr/share/fonts/misc:unscaled"
	FontPath     "/usr/share/fonts/local"
	FontPath     "/usr/share/fonts/75dpi:unscaled"
	FontPath     "/usr/share/fonts/100dpi:unscaled"
	FontPath     "/usr/share/fonts/Type1"
	FontPath     "/usr/share/fonts/URW"
	FontPath     "/usr/share/fonts/Speedo"
	FontPath     "/usr/share/fonts/PEX"
	FontPath     "/usr/share/fonts/cyrillic"
	FontPath     "/usr/share/fonts/latin2/misc:unscaled"
	FontPath     "/usr/share/fonts/latin2/75dpi:unscaled"
	FontPath     "/usr/share/fonts/latin2/100dpi:unscaled"
	FontPath     "/usr/share/fonts/latin2/Type1"
	FontPath     "/usr/share/fonts/latin7/75dpi:unscaled"
	FontPath     "/usr/share/fonts/baekmuk:unscaled"
	FontPath     "/usr/share/fonts/japanese:unscaled"
	FontPath     "/usr/share/fonts/kwintv"
	FontPath     "/usr/share/fonts/truetype"
	FontPath     "/usr/share/fonts/uni:unscaled"
	FontPath     "/usr/share/fonts/CID"
	FontPath     "/usr/share/fonts/ucs/misc:unscaled"
	FontPath     "/usr/share/fonts/ucs/75dpi:unscaled"
	FontPath     "/usr/share/fonts/ucs/100dpi:unscaled"
	FontPath     "/usr/share/fonts/hellas/misc:unscaled"
	FontPath     "/usr/share/fonts/hellas/75dpi:unscaled"
	FontPath     "/usr/share/fonts/hellas/100dpi:unscaled"
	FontPath     "/usr/share/fonts/hellas/Type1"
	FontPath     "/usr/share/fonts/misc/sgi:unscaled"
	FontPath     "/usr/share/fonts/xtest"
	FontPath     "/opt/kde3/share/fonts"
EndSection

Section "Module"
	Load  "dri"
	Load  "dbe"
	Load  "freetype"
	Load  "extmod"
	Load  "glx"
EndSection

Section "ServerFlags"
	Option	    "AllowMouseOpenFail" "on"
	Option	    "ZapWarning" "on"
EndSection

Section "InputDevice"
	Identifier  "Keyboard[0]"
	Driver      "kbd"
	Option	    "Protocol" "Standard"
	Option	    "XkbLayout" "us"
	Option	    "XkbModel" "microsoftpro"
	Option	    "XkbRules" "xfree86"
EndSection

Section "InputDevice"
	Identifier  "Mouse[1]"
	Driver      "synaptics"
	Option	    "AccelFactor" "0.1"
	Option	    "BottomEdge" "650"
	Option	    "Buttons" "5"
	Option	    "CircScrollDelta" "0.1"
	Option	    "CircScrollTrigger" "2"
	Option	    "CircularScrolling" "1"
	Option	    "Device" "/dev/input/mice"
	Option	    "EdgeMotionMaxSpeed" "15"
	Option	    "EdgeMotionMinSpeed" "15"
	Option	    "Emulate3Buttons" "on"
	Option	    "EmulateMidButtonTime" "75"
	Option	    "FingerHigh" "17"
	Option	    "FingerLow" "14"
	Option	    "HorizScrollDelta" "0"
	Option	    "InputFashion" "Mouse"
	Option	    "LeftEdge" "120"
	Option	    "MaxSpeed" "3"
	Option	    "MaxTapMove" "110"
	Option	    "MaxTapTime" "180"
	Option	    "MinSpeed" "0.2"
	Option	    "Name" "ALPS;Touchpad"
	Option	    "Protocol" "auto-dev"
	Option	    "RightEdge" "830"
	Option	    "SHMConfig" "on"
	Option	    "TopEdge" "120"
	Option	    "UpDownScrolling" "1"
	Option	    "Vendor" "Sysp"
	Option	    "VertScrollDelta" "20"
	Option	    "ZAxisMapping" "4 5"
EndSection

Section "InputDevice"
	Identifier  "Mouse[3]"
	Driver      "synaptics"
	Option	    "AccelFactor" "0.1"
	Option	    "BottomEdge" "650"
	Option	    "Buttons" "5"
	Option	    "CircScrollDelta" "0.1"
	Option	    "CircScrollTrigger" "2"
	Option	    "CircularScrolling" "1"
	Option	    "Device" "/dev/input/mice"
	Option	    "EdgeMotionMaxSpeed" "15"
	Option	    "EdgeMotionMinSpeed" "15"
	Option	    "Emulate3Buttons" "on"
	Option	    "EmulateMidButtonTime" "75"
	Option	    "FingerHigh" "17"
	Option	    "FingerLow" "14"
	Option	    "HorizScrollDelta" "0"
	Option	    "InputFashion" "Mouse"
	Option	    "LeftEdge" "120"
	Option	    "MaxSpeed" "3"
	Option	    "MaxTapMove" "110"
	Option	    "MaxTapTime" "180"
	Option	    "MinSpeed" "0.2"
	Option	    "Name" "ALPS;Touchpad"
	Option	    "Protocol" "auto-dev"
	Option	    "RightEdge" "830"
	Option	    "SHMConfig" "on"
	Option	    "TopEdge" "120"
	Option	    "UpDownScrolling" "1"
	Option	    "Vendor" "Sysp"
	Option	    "VertScrollDelta" "20"
	Option	    "ZAxisMapping" "4 5"
EndSection

Section "InputDevice"
	Identifier  "Mouse[5]"
	Driver      "mouse"
	Option	    "Buttons" "5"
	Option	    "Device" "/dev/input/mice"
	Option	    "Name" "ImPS/2 Generic Wheel Mouse"
	Option	    "Protocol" "explorerps/2"
	Option	    "Vendor" "Sysp"
	Option	    "ZAxisMapping" "4 5"
EndSection

Section "Modes"
	Identifier     "Modes[0]"
	ModeLine     "800x600" 40.8 800 832 912 1024 600 601 604 623
	ModeLine     "800x600" 37.2 800 848 880 960 600 603 607 618 +hsync -vsync
EndSection

Section "Monitor"
	Identifier   "Monitor[0]"
	VendorName   "ATI Proprietary Driver"
	ModelName    "Generic Autodetecting Monitor"
	UseModes     "Modes[0]"
	DisplaySize  353	198
	HorizSync    30.0 - 40.0
	VertRefresh  50.0 - 75.0
	Option	    "DPMS" "true"
	Option	    "PreferredMode" "800x600"
EndSection

Section "Device"
	Identifier  "aticonfig-Device[0]-0"
	Driver      "fglrx"
	BusID       "PCI:1:0:0"
EndSection

Section "Screen"
	Identifier "Screen[0]"
	Device     "Device[0]"
	Monitor    "Monitor[0]"
	DefaultDepth     24
	SubSection "Display"
		Virtual   3840 1200
		Depth     15
		Modes    "800x600"
	EndSubSection
	SubSection "Display"
		Virtual   3840 1200
		Depth     16
		Modes    "800x600"
	EndSubSection
	SubSection "Display"
		Virtual   3840 1200
		Depth     24
		Modes    "800x600"
	EndSubSection
	SubSection "Display"
		Virtual   3840 1200
		Depth     8
		Modes    "800x600"
	EndSubSection
EndSection

Section "Screen"
	Identifier "aticonfig-Screen[0]-0"
	Device     "aticonfig-Device[0]-0"
	Monitor    "aticonfig-Monitor[0]-0"
	DefaultDepth     24
	SubSection "Display"
		Viewport   0 0
		Depth     24
	EndSubSection
EndSection

Section "DRI"
	Group        "video"
	Mode         0660
EndSection

I tried running aticonfig --initial and then run sax -r in init3 but that doesn’t work, all that did is started causing kernel panics.

Check the following link. It helped me. If you have a 64-bit system, do not forget to update the dri drivers as well (Details are given in the link below). Otherwise, it will not work. Hope this helps.

How To: ATI Drivers OpenSUSE 11.1 - Ubuntu Forums