Highly recommended notes

XaaNoOffscreenPixmaps

After running the new driver awhile, I noticed some graphics corruption in the lower-right corner, as well as the mouse cursor taking some funny shapes. Other users have reported corruption running Firefox as well. The Gentoo notes, as well as various sources on the internet talk about adding a driver parameter to your xorg.conf:

Option "XaaNoOffscreenPixmaps" "on"

This would stop corruption from occuring.

Additionally, at the Unofficial ATI Linux Driver wiki, explaining the enabling of the XaaNoOffscreenPixmaps parameter to improve 2D performance.
I haven't really noticed a performance increase myself (though, I have yet to intensively work on my laptop since the update), but the graphics corruption no longer seems to be an issue.

UseFastTLS, or how to get OpenGL to work with Wine

Apparently, there is an incompatibility issue with the ATI driver and Wine concerning TLS. The ATI driver has a way of dealing with this problem by setting the UseFastTLS option to be compatible rather than fast. With this set, Wine will no longer crash when running 3D apps with the ATI driver, but this also results in a 3D performance penalty of around 10% (according to Unofficial ATI Linux Driver wiki). Note that if you want to use Wine with OpenGL, you have to enable this option anyway, because newer versions automatically turn off 3D when you're using the ATI driver with this option unset.

Option "UseFastTLS" "2"

Adding this option enables compatibility with Wine, and re-enables the use of OpenGL in Wine. If you don't use Wine, it's best not to set it, so you won't be needlessly penalized.

Notice

I also use Cedega, which doesn't seem to complain about this issue. Does anyone know whether this bug is present there as well?

VideoOverlay and OpenGLOverlay, or how to properly have hardware video playback support

Notice

First off, if this information is incorrect, please let me know, as what I'm about to tell dates from the 8.2x series of the ATI driver. I don't know if this is still an issue or not.

By default, the ATI driver does not have support for Xv extension enabled. Instead, it will use an OpenGL texture for video overlay. This results in not being able to playback video through the Xv interface. There are parameters however that control this behaviour and allows the Xv support to be enabled, and the OpenGL overlay to be disabled. To do this, two parameters have to be set:

Option "VideoOverlay" "on"
Option "OpenGLOverlay" "off"

This effectively enables Xv support. Note that you explicitly have to disable the OpenGL overlay. Otherwise, OpenGL will still be preferred. If you don't plan to play back video files using Xv (though I don't see how you wouldn't), you can ignore this.

OverlayOnCRTC2, or how to playback video on your second monitor

Notice

This is for people who use dual monitor support, or use an external display device on their laptop (like a TV or external monitor).

Currently, it is not possible to have the video overlay (Xv or OpenGL) on both screens (this is a limit in the driver), even if you're running in Clone mode. So, you have to choose on which screen you want the overlay. Now, if you're like me, and have a laptop on which you sometimes connect an external monitor (for a higher resolution), you may need to enable the overlay on the second head. In case of my laptop, the primary display (the built-in panel) is always active, so the only way I can watch video on my external monitor, is by setting this option. If you do not, you will notice that sound will be heard, but no video is shown (except for a black window).

Option "OverlayOnCRTC2" "yes"

This will set the overlay to run on the second monitor.

Notice

Since version 8.3x, if you run X with the second monitor disconnected (so you run in a single head setup), you will have to unset this option (or set it to no).
If you don't, X will crash when attempting to use the Xv extension. (Don't know if ATI has fixed this yet).