You should be able to use the r128 kernel driver, and the kernel DRM to get acceleration working, according to
this page.
However, you might need to upgrade your kernel; I'm using 2.6.8.1 and that driver is there (I checked, using a make menuconfig), but marked 'NEW'. I don't know when it was added, since I don't have one of those chips, but you might not have it yet (it might be really new, and not present in 2.6.5).
Hope this helps.