Have you tried your Radeon card with fatdog64 600?I have what i thought was a reasonably new radeon but it is low end, kernel modesetting does not work with it.
With my RS880G, which is a 3 or 4 year old design, the Xorg R600g driver, in FD64, does DRI2, KMS and 3D acceleration perfectly. The R600g plus Evergreen should work too.
The R600g requires KMS because it no longer has userspace modesetting, I think it happened when Gallium 3D was merged last year.
Kirk and jamesbond seem to have got the kernel sorted.