One thing I forgot to mention: we also had to disable PCI delayed transactions from the BIOS configuration screen.
What's that about the Radeon not being well supported by XF86 4.2? I was under the impression that the Radeon 8500 and up were fully supported and that the 7500 is fully supported with the DRI driver?
We have a notebook with a Readeon 7500 and sometimes, when the xserver (4.2.1) starts, it just displays agitated nuts and we have to stop and restart it. But maybe it only happens on the notebook version of the chip? We did not try any OpenGL program with the DRI though, so I cannot tell how it behaves.