I've just upgraded one of my boxen to Ubuntu Jaunty Jackalope, and I wish it had been easier. The problem is that the new version ATI's proprietary fglrx driver doesn't seem to support my video card. For other reasons, single user mode was also broken. So I even had trouble getting a root shell.
But on the bright side, the open source drivers have "gotten there" for me-- this is a Home Theatre PC (HTPC), and I now get smooth, tear-free playback at 1920x1080. I don't get 3D acceleration, though.
fglrx is a greedy constellation of software that tries to control your hardware even when you've selected the open source drivers, and this stops the open source drivers from working correctly. Even if they show the display correctly, fglrx's Direct Rendering Manager can interfere with the standard Direct Rendering Manager, preventing video acceleration. So I recommend uninstalling fglrx before upgrading. Then you'll know whether the Free drivers are up to scratch on your hardware, and you can try fglrx if they're not.
To remove fglrx, open a terminal and type: "sudo apt-get remove --purge xorg-driver-fglrx fglrx-kernel-source; sudo reboot"
After the reboot, the open source drivers should kick in, and you'll be able to upgrade to Jaunty while they're in use. Once you've got Jaunty working, you can try your luck with fglrx again if you like. I probably won't :-)