I’ve solved the problem with my ATi Radeon 7000 graphic card. I’ll leave this for future reference, you never know…
The Symptoms
ATi Radeon 7000, in combination with an Acer AC711 monitor (17″), just goes wild under XFree86. With the default configuration, X loads with an resolution of 640×480, and a virtual resolution of 1024×768. No matter what modeline I put inside my XF86Config-4 file, and no matter what option I specified for the radeon driver, I could get X to use an higher resolution.
The Solution
The only way of making a ATi Radeon 7000 work with my 17″ monitor was to enable the Radeon framebuffer device inside the kernel (you might want to load the module during the boot sequence, but I strongly suggest recompiling the kernel with the framebuffer device built-in), and change the Device section inside the /etc/X11/XF86Config-4 file like this:
Section "Device"
Identifier "ATi Radeon 7000 VE (RV100 QY)"
Driver "radeon"
Option "UseFBDev" "true"
EndSection
I’ve highlighted the line you should add
By telling X to use the framebuffer device, the card successfully reaches a usable resolution, and the virtual desktop is gone for good.