The xf86-video-radeonhd driver was the first open-source driver to fully support the Radeon X1000 series graphics cards (R500) (after the short-lived Avivo driver) and went on to support the R600/700 series too. However, not before long, the xf86-video-ati "Radeon" driver ended up picking up support for the R500+ ASICs via the use of AtomBIOS rather than hard-coding in the support, which led this long-standing open-source driver to more quickly support enticing end-user features. Many other milestones and developer feuds took place too, but this is the one paragraph synopsis.
Mode-setting for ATI Radeon hardware has since moved into the Linux kernel and the xf86-video-radeonhd driver really hasn't seen much activity with the core AMD developers since diverting all of their attention to the xf86-video-ati driver as it concerns the DDX. The RadeonHD driver still receives new commits from time-to-time, but last year they also suffered a major setback when one of the main developers was laid off by Novell.
Now though the RadeonHD driver has perhaps suffered its final blow as the RadeonHD driver is no longer being used as the default within Novell's own openSUSE distribution. As is said in the OpenSUSE 11.3 Milestone 6 notes, "radeon video driver has superseded radeonhd, providing KMS/DRI support."
These days the xf86-video-ati driver supports more hardware and features than the xf86-video-radeonhd driver does, and every other major desktop Linux distribution these days use xf86-video-ati with kernel mode-setting, but now Novell has abandoned its child within openSUSE.
The openSUSE 11.3 Milestone 6 release also begins to leverage the xorg.conf.d support found in X.Org Server 1.8, moves the VDPAU library into a package independent of NVIDIA's binary driver, and has various other changes. The final release of openSUSE 11.3 is expected in July.