I have Kubuntu Natty, with ATI graphics, KDE 4.6.2 and fglrx driver. After some apt-get upgrades I get "cannot connect to X server" as a normal user, and no graphical desktop, but as root I can startx to the graphical desktop. Can someone tell me what's wrong and how to fix?

Are you running the open-source or proprietary drivers? Have you added the Kubuntu Updates, Backports, and/or Experimental PPAs to your software sources? Yesterday I did an upgrade right when the Experimental PPA was being rebuilt and ended up with a few packages missing. This caused symptomps similar to what you're seeing now. Check my post in the Kubuntu forum about that.