a second follow up. With DRI it just won't work. Here are my setting
which give reasonable speed and no garbage on the screen:

Section "Device"
        Identifier      "Configured Video Device"
        Driver          "radeon"
        Option          "AGPMode" "4"
        VideoRam        65536
        Option          "AccelMethod" "EXA"
        Option          "MigrationHeuristic" "greedy"
        Option          "AGPSize" "64"
        Option          "DRI" "off"
EndSection

-- 
[RV100] very poor Xorg performance on various older graphics HW - XAA no longer 
works
https://bugs.launchpad.net/bugs/363238
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