First off, i would prefer you to download kernel-2.4.22 from www.kernel.org
to get your video card working at it's full speed or you could play game in Linux.
I am running the same operating system as your which was redhatlinux 9.0 and you don't need to upgrade your XFree86.
It came with newer version XFree86-4.3.0.
please gave more info on your hardware or do post the output of "lspci".
What you should do now, was to download a driver from www.schneider-digital.de
the driver's link was
The reason why, i didn't tell you to get a driver from ww.ati.com was that ati doesn't write no good driver for it's hardware and this driver was better than the one from www.ati.com,
however still with the same futher!
after you download the driver, double click it to unzip it to your home directory.
Then login as root.
Open up a terminal
"cd" to where you had download your driver.
type "rpm -ivh --force fglrx-glc22-4.3.0-3.2.8.i586.rpm" if you had download the driver i linked you.
then type "redhat-config-xfree86" , under Advance section, copy download the Horizontal and Vertical refresh rate.
then type "fglrxconfig" to configure your card. During the process, you have to use external agp in order to get your 3d work.
then add "/sbin/modprobe agpgart" and "/sbin/modprobe fglrx" in your /etc/rc.local file.
Type "glxgears" to see what's it say, it the frame rate was around 3000. Then, you got your video card working.