Maybe, I found the solution for this strange behaviour:
After trying to get the twinview going i have the exact same "garbled screen after switching from x to terminal" problem!!
Ive found that this only happens with my tv hooked to the card. pulling the cable from the tv without any changes to the config stops this odd behavior....
hmmm these colours really look like a 1982 vga game
but.... would be great to fix this problem, because i like the 2d speed of the new driver set so much!
I haven't tried to reinstall the latest driver, but: My TV is hooked to my graphics card....