Okay I'm really lost on this one. After installing AMD Catalyst driver 12.1 on my laptop, it worked after a few tweaks. I was jumping with joy prematurely because the driver finally worked, only to find out later after a reboot that the proprietary driver went nuts yet again (same with the earlier AMD graphics drivers last year I've tried).
As usual when using fglrx I get a black screen instead of GDM, and if I do manage to get to a desktop I get the error from AMDCCCLE control panel that it cannot initialize because the device or driver is not found (something like that). So going back, Ctrl+Alt+F* keys are useless. After a couple reboots with the same result, I continued to recovery mode and deleted all fglrx related installs. I proceeded to reinstall a few packages as suggested on this page - http://wiki.cchtml.com/index.php/Ubuntu_Natty_Installation_Guide#Removing_Catalyst.2Ffglrx.
Note that I've done this several times without issues but the flgrx drivers. Whenever I reverted I always got everything back to normal. This time is not the same. Keyboard and touchpad are not working. The wireless mouse will work after I plug in the receiver when the boot reaches GDM, or I unplug-plug it. This is not a hardware issue. On Windows 7 and Live Ubuntu all 3 devices work properly without me doing anything.