The problem is X and your graphic card.
You can do a hardcore install :-) Googel backtrack perfekt disk install I saw a guied
Something like this create , boot , root. Copy alla data from the booted CD too them. fix
fstab and grub, When you are done try dowload Radeon driver from there officel site and
install it then I think X will work.
Or you can try harder in fixing a xorg.conf that will work. Try download and install Radeon driver
direkt from booted usb.