From Ubuntu 7.10 Gutsy Gibbon Release Notes:
Suspend to RAM with fglrx
Attempting to suspend to RAM using the "fglrx" ATI video driver from the restricted component will hard-lock the system due to changes in the kernel's memory allocator (which will be the default in Linux 2.6.23) that have not been followed by ATI in a timely fashion; we do not have the resources to support more kernel flavours to support a single outdated driver at this point. Workarounds include remaining on Ubuntu 7.04, avoiding suspending to RAM, or using the free ATI driver. Bug #121653
Gutsy Gibbon Release Notes
Thanks Tyler & Adrian for the heads up, keep reading and thanks for contributing. I will post an update as soon as the bug gets squashed.
edited by pHreaksYcle