UbuntuStudio Hardy w/ Radeon Mobility x1600(M56P) : Success!
So I went the the guide for installing the RadeonHD driver and have had success. GLXGears runs around 1500fps. My 2d windows and such are snappy. I also just watched some video that was smooth.
I listed to some music with a 3d visualization that slowed my mouse response quite a bit. Also, one of the times I ran GLXGears and moved its window my computer froze hard, I had to hard reset it, but it hasn't happened since. My Xorg log still says something about my chipset not being identified, but glxinfo seems happy and I have DRI. My xorg.log is here for reference. Let me know if you would like me to test anything. FYI: I am running UbuntuStudio so its a Real Time kernel, EXA accel and DRI enabled.