Comment 87 for bug 291040

I did some more testing here. I have XFX 4770 512MB, and a pretty standard AM2 configuration (Athlon 7850 on ASRock 770/SB700 board).

1) Recent changes in xf86-video-ati, I believe, made this less frequent. For example, System/Preferences/Appearance in GNOME shows themes correctly. They used to be corrupted before (looking like a chess board).
Xv works in Totem and mplayer, but YouTube videos get corrupted.
On mode switch, whole screen gets corrupted, but goes back to normal after changing desktop background. I believe this trick didn't work before.

However...

2) Upgrading to mesa-git and drm-git from airlied's repository, and enabling DRI makes all kinds of corruption that appeared before go away. Even YouTube works normally.
OpenGL vendor string: Advanced Micro Devices, Inc.
OpenGL renderer string: Mesa DRI R600 (RV740 94B3) 20090101 TCL DRI2
OpenGL version string: 1.4 Mesa 7.7-devel

A bit off-topic - two things break:
first and foremost, Xv displays only blank screen, even xvinfo looks normal.
second, I get
do_wait: drmWaitVBlank returned -1, IRQs don't seem to be working correctly.
Try adjusting the vblank_mode configuration parameter.
when running glxgears
third, dmesg is filled with
[drm:r600_cs_packet_parse_vline] *ERROR* unknown crtc reloc
[drm:r600_packet0_check] *ERROR* No reloc for ib[691]=0x6538

Hope some of this helps...