Here is the solution I found to the issue (quoting from another site) :
http://nerdysermons.blogspot.in/2011/11/solve-graphic-driver-errors-unity-3d.html
There are 3 suggested methods that are given in this post. I have tried all three and the third was the one that worked for me.(That is the option where you install the open source drivers removing all the existing drivers). The second option actually caused my system to hang after the Ubuntu splash screen.
The procedure given in the above site, for simplicity's sake, and for your ease can be summarised as follows:
Prior to taking any of the above approach, run this command to install dependencies :
sudo apt-get install build-essential cdbs fakeroot dh-make debhelper debconf
Install Open source Graphic Drivers (Recommended) The below command will remove all traces of Ubuntu's default fglrx drivers (if installed).
sudo apt-get remove --purge fglrx fglrx_* fglrx-amdcccle* fglrx-dev*
Remove the existing xorg.conf
sudo rm /etc/X11/xorg.conf
Reinstall the xorg.conf
sudo apt-get install --reinstall xserver-xorg-core libgl1-mesa-glx:i386 libgl1-mesa-dri:i386 libgl1-mesa-glx:amd64 libgl1-mesa-dri:amd64
Configure xorg
sudo dpkg-reconfigure xserver-xorg
Reboot the system
sudo reboot