I am experiencing the same problem as well. I run a fresh install of
karmic with all current updates installed and have a radeon 4850 running
on proprietary drivers which came with the install as well(I don't know
where to look for the version, but after the install a proprietary
driver was suggested to be installed to run 3d games, so I clicked yes)

When watching videos, playing games or even in normal desktop use(when
moving around windows, etc.) the tearing effect is pretty noticeable. I
tried setting fglrx options an also added radeon.modeset=1 to
/etc/default/grub as suggested above but it had no effect.

-- 
Can't VSYNC properly on ATI (Mobility Radeon HD 2600 XT)
https://bugs.launchpad.net/bugs/214154
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