Welcome to the "Club". Unfortunately i can't help you but i want to let you know that you are not alone..... i am having quite exactly the same problem with a Radeon 9200 and SuSE 10.0.0, Kernel 2.6.13-15-default.
I get either no TV-out (original Linux driver) or no 3D (ATI proprietary) due to installation problems. Last night, after 8 hours straight, i got the driver to install 100% correctly, which Linux thanked me by disabling X. I have now reinstalled the whole OS from scratch just to go on working. Nowe i have no more TV-out (using original Linux driver again) but 3D.
You may have the same problem i ran into (getting MESA instead of FGLRX). For me the problem was that, during installation of the ATI driver, errors occured - missing kernel sources, missing compiler. It still installed, but as mentioned - MESA instead of FGLRX.
You could check at this location /usr/share/fglrx/install.log
That's a log file which should have all errors, if any.
Be carefull.... you may end up like myself wioth no GUI...... ATI and Linux don't seem to play well together, lots and lots of people having the exact same problems.