OK, so your GPU is using the open source radeon driver correctly. It is the only driver you can use.
If OpenGL applications aren't working, it's because they are either too powerful for your video card or your video card drivers. I know, for example, that UnrealTournament 2004 will not work with OpenGL on that GPU. It is very possible that the original UnrealTournament won't either. The only possible option you have would be to upgrade your drivers and, for that, I would recommend using a newer distribution.