Go Nouveau. Btw, open source ATI drivers would welcome developers, too. Even though the basic and even quite advanced functionality is there, there are some rather serious problems with some specific cards - I'd guess too many of the current developers have working cards :)
There also used to be autodetection problems, and to some extend still is (MonitorLayout needs to be specified for some). But if you happen to be an X300 - X800 owner who found out that Driver "ati" , the wrapper for other ati drivers, does not work at all for you ("radeon" does, but you have to specify it manually), or that any 3D, eg. glxgears, gives you an error message please try out one of the newest daily Ubuntu releases at http://cdimage.ubuntu.com/daily-live/ - no, Herd2 is not new enough except for the latter problem. Those two bugs affecting some percentage of 9500 - X800 owners were fixed recently in mesa/drm (and kernel 2.6.20) and the ati DDX driver.
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