it's necessary to restart the x-server, but no, you don't need to reboot. in linux, technically, it's never necessary to reboot.
the XF86Config-4 file is the default for X-4.x.x, but if it's not present in the /etc directory, then X will use the /etc/XF86Config file. X-3.x.x used the XF86Config file, but doesn't use the XF86Config-4 file. the difference in the two isn't really huge, but the video-card sections need a driver line, and it's necessary to load some extensions that were automatic in the older versions of X.
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