I had the same problem as you, and i was able to solve it, i also have the same video card (but using RH9)
First you have to do is download a source kernel from
www.kernel.org (i use 2.4.21), and recompile it.
After this, run the fglrx rpm from schneider's website
DO NOT USE fglrxconfig TO EDIT THE XFree86Config-4 FILE!!!!
All you have to do is edit the file and replace the driver name from "radeon" to "fglrx" and add this line:
Option "VideoOverlay" "on" (it worked to me to play mplayer with xv drivers).
Then reboot your machine, it should work
Hope that helps you.