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 :-(