Dragging the post kicking screaming back on thread...
From what I gather, ATi Radeon, prior to the 8500 series are pretty hit and miss. They are supposed to be fairly fully supported in XFree86 from (IIRC) 4.1.0 onwards, with only a few bugs to do with dual heads, but hardware acceleration should be supported without problems. X.org, though still doesn't seem to support HW acceleration yet, but according to LXF 68, in the big article about X, it seems a major rewrite is coming and things like HW accelration, direct rendering, and other groovey terms I don't quite understand, will be supported, and much better.
I have an ATi Radeon 7500 64 MB card. Reading the man page for it and XFRee86 4.3.0, it should have HW acceleration up and running with just the lines:
Load "glx" to the Module section, and
EndSection to the end of XF86Config.
But, I tried to run one game (Boson) which complained that direct rendering wasn't enabled, and the game would run quite slow. 'Run' wasn't the word. A deathly crawl was more the result.
I don't know how to test to see if DRI is enabled without running something like a game that looks for it. Any ideas?