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(Note: this is more of a newbie solution)
I've read a few posts about people having problems installing Fedora with newer ATI cards (in my case, a Radeon 9800 pro). The problem: redhat included an experimental driver that allowed 2D to work "sufficiently". Unfortunately, it doesn't seem to work. The solution: well, you can't do a graphical install. The driver gets loaded to do that. So, when the cd is first booted, instead of pressing ENTER, type "linux text". The text install is pretty informative, and if you've ever installed a Red Hat version before, it's pretty much the same. Now, after installation, normally you would just boot the os. But, like earlier, the bad driver is loaded. I tried to figure out how to boot to the text mode, but was unsuccesful. What you need to do is boot again from the cd, and type in "linux rescue". You will also need to enter the chroot command that is displayed before the command prompt. This will give you access to the os without loading the bad driver. Now, go into your /etc/X11/XF86Config file and go down to the section on your video card. You should see a line like "Driver "radeon"", and your card listed just below. Change from "radeon" to "vesa". This will give you a generic driver. Save, exit, and reboot (or type exit twice). Now you can boot into the graphical os with the generic "vesa" driver. Go to ati's website, and get their latest linux driver for X 4.3. Install that, and you'll have 2D working correctly (can't belive redhat didn't fix this in the first place), and 3D accel as well! Good luck!