If using the latest ATI open-source driver Git code for kernel mode-setting, there may be slightly better X-Video support without any visual slowdowns/problems. Pauli Nieminen has changed around the code so that a video buffer is allocated in the GTT (Graphics Translation Table) to provide faster memory operations that haven't been accelerated by KMS.
The patch that provides the performance boost to X-Video under ATI kernel mode-setting can be found on the xorg-driver-ati mailing list and has since been committed.
http://www.phoronix.com/scan.php?page=news_item&px=Nzk4NA
KMS doesn't have acceleration for upload to vram. memcpy/memmove to VRAM directly is very slow (40M/s in benchmark) which causes visible problems to video.
Allocating video buffer in GTT will give good performance (350-450M/s) for memmove operation. This is nice performance boost for Xv under KMS.
