With my x1900xt 2d seems very snappy, but I've only tested KDE-apps, not firefox or anything else.
I didn't notice any major performance problem with Firefox when I used KMS on my HD3450. I wasn't using it that long, but if it was as bad as people are saying I think I'd notice.
On my RS780 board, which is basically a HD3200 board, I don't have any slowdown and Firefox works without a glitch.
Either there is something wrong with R700 based-boards (like the 2D made by the 3D engine) or there is something wrong with one of the stack of X provided by your distro.
If I compare my desktop system (rv770) with my rather ancient notebook (r300),
both on xorg-server 1.7.5, KMS, KWin (4.4), Linux 2.6.33 with mesa, drm and ddx from git,
the notebook performs perfectly smooth while the desktop system feels not as snappy.
Sounds plausible that recent chips (r600+) with a unified architecture require more
optimization work for 2d acceleration than the "older" parts that feature fixed function 2d hardware
that is now implemented using shaders. So it's (at least) one more layer, right?
Maybe there's a DE/WM component to the problem? I was just running Fluxbox when I tested KMS.
I've been using KMS on my r600 ( integrated on my laptop motherboard, but with discreet memory ) for 2 months or so now. 2D is actually really snappy. It's also far more stable. Can't complain really.
are people seeing slow r600/700 running on AGP systems?
also as someone else said make sure server 1.7 for KMS.
Everything has been running just fine here using r700 and KMS+DRI2.
The game performance is not spectacular, but OpenArena, Nexuiz and a bunch of others run just fine and are playable.
I think my xorg-x11-drv-ati is from git, but my libdrm and Mesa are definitely from F12's repositories still.
[Mind you, the HD4890 is in a new quad-core i7 PC - maybe that's why I'm not noticing any performance drop?]