Ubuntu distribution upgrade from 7.04 to 7.10 on a dell inspiron1501 laptop completed, but X windows failed to start. The solution was to:

sudo apt-get update
sudo apt-get install linux-restricted-modules-generic restricted-manager
sudo apt-get install xorg-driver-fglrx
sudo depmod -a

Found here: http://wiki.cchtml.com/index.php/Ubuntu_Gutsy_Installation_Guide