I am using the latest ATI driver, 8.4, and performed the manual install by creating .deb packages and installed that way. One thing i had to do was do a insmod fglrk.ko from the /lib/modules/$(-uname -r)/dkmp/misc (think that was the dir, where ever the file lives though) and then start up the program in order for the display to work properly.
However, once it's working instead of alpha blending it just continuously flashes. So imaging your task bar in gnome/kde flashing on and off really fast.
I am currently at work so i can't post my xorg.conf. however i can tell you that i have agilx=on, DRI loaded and direct rendering is working, i also have composite, render and damage = true. in the driver section,