Generally folks heree would probably recommend 'radeon' over 'radeonhd'. However, as long as you aren't using KMS, either would work. What is 'kernel 2-69.6'? You say you upgraded Xorg, libdrm, and Mesa, but you don't say what versions of those you are using. Can you please attach your /var/log/Xorg.0.log file to a post here?
Adam


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