I don't recommend using Ubuntu for many GPUs at all. I've been using Ubuntu, but had troubles with third card in my setup. Reinstall to Squeeze helped.
As there are many users reporting troubles with Ubuntu & GPUs, I think there is something broken inside.
Edit: I found the trouble: don't use 32bit Ubuntu (or whatever else 32bit distro)! ATI drivers allocate 256 MB of virtual memory for every core, so setup with 8 cores ate whole 32bit memory space. 64bit installation should work fine (I didn't tested it yet). Thanks ArtForz for investigation.
I'm gentoo fan, but I have working machine with 2x5970 + 5870 running from modified ubuntu liveusb (without hdd), 32 bit, with 1GB RAM. So not sure about that theory. (btw, 8x256M=2GB, so by runnig out of 32bit mem you mean system is using more than 1.5GB?)