Hmm,
xvideo seems to be configured well. You could try the new ATI 3.9.0 drivers at
www.ati.com. But I wouldn't bet to much hope on them, because there are no fixes in the xvideo module.
I also have some troubles with ATI drivers. Therefore I have two XF86config files. One with ATI drivers for OpenGL and one for standard XFree86 RADEON with no 3D acceleration. (xvideo runs a lot better with them)
When I want to use an application having trouble with ATI drivers (and there are a lot). I copy my standard XFree86 RADEON config to XF86config and hit ctrl+alt+backspace for rebooting the X-server. It's annoying, but quite fast.
I know this is not the optimal solution, but better then doing without some applications.
If you give the new ATI 3.9.0 drivers a try, I highly recommend first uninstalling the old ones with
rpm -e drivername. I went in a lot of trouble just updating with rpm -Uhv --force newdrivers.rpm, how ATI recommends.
Good Luck and sorry for not having a good solution