I don't know why it is working now, but here are the steps I took. This is on a ThinkPad T60P with a FireGL 5200 Mobility chip. Compiz works. Full transparency in apps. Video working.
1. Clean install of Gutsy. -Or at least remove all references of fglrx from install and revert to default xorg.conf and ati driver.
2. Update Gutsy. -Ignore restricted notification for fglrx. Not necessary if you're already up-to-date.
3. Build debs for 8.44.3, install, reboot. -Use any of the guides out there. I used this one, method 2: http://wiki.cchtml.com/index.php/Ubu...allation_Guide
4. Run sudo aticonfig --initial and reboot.
That's it. After these steps, everything works with no additional changes to xorg.conf. I don't play games, so can't comment if they work, but as stated above everything else works great. Now if I could just get suspend-to-memory to work :-(
One addition. When building and installing the fglrx driver you are asked to replace the compiz-manager file. Allow it to replace by saying "Yes". This adds the fglrx driver to the whitelist for compiz. One important point is that under Ubuntu, compiz is started with the "/etc/xdg/compiz/compiz-manager" script, and it starts automatically. The "/usr/bin/compiz" script is not used. Also, if you use the fusion-icon, run it with no-start option so it doesn't try to run another instance of compiz.