I have rh8 and a pci radeon card. I just recently installed xfree86 4.2.99.3 and mine works but i cant get direct redering to work so far. For info on how to get it to work go to
http://dri.sourceforge.net/
go to the help and faq page.
scroll down to the section on installation and configuration
click on the question How do i enable PCI Radeon support for x86?
this will help with PCI Radeons.
For Agp Radeons u need to follow the directions in the documentation page. look in the DRI Users Guide for starters.
I hope this help a little...