I am working on a functional dual-monitor setup for when I drop my Lenovo T60 (2613-EAU - Radeon Mobility X1400 128M) into it’s dock while at work, and I am partially there.. The first thing I needed to work out the fact that Debian Etch comes with a version of the proprietary ATI flgrx driver/module (8.28.8) which has a broken xv implementation, so multimedia software like mplayer cannot use XVideo - this has been an annoyance to me since Etch released, so I started my adventure by grabbing the latest version from ATI and building my own packages:
(check http://ati.amd.com/support/drivers/linux/linux-radeon.html for the latest version, and adjust URL - as of writing, the latest is 8.42.3)
$ wget https://_path.to.download.url_/ati-driver-installer-8.42.3-x86.x86_64.run
Now let’s make sure we have all the bits in place to build our .deb’s (as root, if you do not use sudo..):
$ sudo aptitude install module-assistant build-essential dh-make debhelper debconf libstdc++5 linux-headers-$(uname -r)
Build the fglrx-driver/driver-dev/kernel-src/amdcccle .deb’s, install ‘em, then go build/install the fglrx-kernel module package (in my case, the new .deb’s handled upgrade/removal of old packages perfectly - ymmv, I suppose):
$ sh ati-driver-installer-8.42.3-x86.x86_64.run --buildpkg Debian/etch
$ sudo dpkg -i fglrx*.deb
$ cd /usr/src/
$ sudo module-assistant prepare
$ sudo module-assistant a-i fglrx
The simplest thing to do is to reboot, at this point, or you can go to single-user mode unload/load fglrx, etc.. My existing, relatively stock xorg.conf worked fine for the new version, with the exception of totally jacked up tiny fonts in XFCE upon login. I started fiddling with font sizes in the settings, then logged out of XFCE to check that the changes stuck - only to find jacked up huge fonts.. Resetting them back to where they were (and have been for many moons..) and another reboot for good measure, I am back to my normal-looking, productive self 
I still need to dig through various and wildly varying xorg.conf examples and dual-head configs out there, and work out a decent configuration for what I might want to accomplish. From some limited reading thus far, I may just set up the external VGA port on the T60 to mirror onto the second monitor so I can shut the lappy and save LCD wear and tear, then use the Catalyst Control Center to enable “Big Desktop” mode when I feel the need. Once I have a good xorg.conf, I will update this post.
Update: here is that xorg.conf
