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I always used guest additions. I am not using catalyst. This is a recent installation and catalyst requires a much lower version of xorg.
Installing the opensource radeonhd driver along with increasing the virtual CPU count to four seems to have solved it for me. I now can do tasks that were impossible to do in Windows 7 without freezing my entire system. I will mark it as solved, once again.
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I opened an upstream bug report in which they recommended that I try a different distro. So, I went back to Ubuntu where it has been working flawlessly even with AMD-V turned on.
This definitely is a problem with Arch or the Kernel. Unfortunately, I replaced my Arch installation, so I can not personally replicate this problem again.
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