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You need the ATI proprietary driver which you can download from ATI's site ati.amd.com. When you download it there are directions on how to install it. If it gives you problems, then there is an uninstall script that you can use instead of just re-installing Fedora.
In theory that will create an xorg.conf.new file in whatever directory you run the command in, and if you copy it to /etc/X11/xorg.conf and use that as a starting point for the ATI driver. By the way, don't panic if X goes wonky while that command runs. It will go back to normal when it is done.
Hm. Sorry about that. I guess Fedora 10 is just backwards distro. I've got mine running smoothly on Slackware-current (although it did require a patch to run on a 2.6.29 kernel) if you were serious about switching distros. Given that Fedora is a gigantic beta test, I guess I'm not surprised normal stuff doesn't work.
i have the same proble, i use ubuntu and aparently amd is turning a little more open source, in this case the open driver works fine on a clean instalation, but after installing and configuring the card x goes hangs (this is after the reboot) i was trying to check the version of the ati driver used in the latest ubuntu but, i could not find out, so i downloaded the 9.4 from amd and gave me the same result, X hangs, I still need to try 9.3, 9.2, and so on because the 8.somethig worked nicely, or we could help the Xorg developers test our card since they have added support for it (we use RV770) so that would be better.