Installation

This article contains some notes about the latest 7-12 ATI linux drivers. Biggest change in versions after 8.40 (aside of the new versioning scheme), is the support for Composite and AIGLX extensions, and the supposedly improved 3D performance. Unfortunately for some, support is currently limited to newer Radeon cards only.
Installation on my X700 was not entirely straight-forward, though.

Installation took place on my laptop which has a X700 on-board, but the driver only worked properly after some tweaking of xorg.conf...

Installation itself

Since I'm using Gentoo, installation of the latest driver was fairly simple:

ACCEPT_KEYWORDS="~amd64" emerge -u ati-drivers

At time of writing, this would install x11-drivers/ati-drivers-8.443.1-r1. Note that if your system is x86_32, you need to substitute ~amd64 with ~x86.

Additional configuration

At the end of the installation, with Gentoo, you'll get some warnings about screen corruption and about Wine. Again, this is a good example of how important these notes are, because I needed it. Without the proper adjustments, I had some trouble with display corruption in the lower-right corner of the screen, and Wine would outright refuse to run. I'm adding additional notes here as well. And of course, for those that don't use Gentoo, I've listed the recommended adjustments too.