How do I fix “Ubuntu is running in low-graphics mode?

1. Look in your /var/log/Xorg.0.log.old or /var/log/Xorg.0.log. The error (if there is one) will be at the tail end of the file. Another good place to look is the log files in /var/log/gdm/* (or /var/log/lightdm/* in oneiric).

2.Follow these commands:

sudo apt-get update
sudo apt-get -d install --reinstall gdm
sudo apt-get remove --purge gdm
sudo apt-get install gdm

select GDM when prompted

sudo reboot

That fixed it for me :)

3.Try delete your /etc/X11/xorg.conf and restart.

Before restart, run

sudo apt-get install xserver-xorg-video-ati xserver-xorg-video-radeon