First of all, ATI driver installation is hell; no matter how you do it, it hardly ever works unless you're just magically luckily inclined to win at life.
Note: I've only had success doing this with a fresh install. If I'm upgrading; I'll just run the installer without building the package; sometimes... hah, sometimes it works.
What I do is download ATI's drivers from their website.
Then, I navagate to the location of the file; and run this in the terminal while logged in as root::
./ati*.deb --buildpkg Debian/lenny
fill in the "Debian/lenny" with whatever distro you are using
when it finishes, go back into the terminal and type::
dpkg -i fglr*.deb
and I let it install the programs, if you get diversion problems; go into synaptic and remove all of the drivers and install the fglrx-driver from the contrib non-free repository. Then uninstall them; it should reset the status of your libGL.so.1 file so it no longer erros upon installation.
to configure xorg.conf
Good luck. I've spent hours working with ATI Drivers before out of frustration. Remember, you can always set it back to the way it was by copying and pasting your original xorg.conf file so it sets it back to default.
remove and reinstall xserver-xorg
remove and reinstall fglrx-driver fglrx-source fglrx-kernel fglrx-module
remove all items related to fglrx in synaptic, run apt-get update, then apt-get install -f and try again.
It's a process; I assure you.