Distro: Linux From Scratch - ask for versions of specifics if needed
Kernel: Linux 2.6.23.1
Video: ATI driver fglrx version 8-10

xorg.conf settings for video:

Identifier "Card0"
VendorName "ATI Technologies Inc"
BoardName "Radeon Mobility X1400"
Option "shadowfb" "True"
BusID "PCI:1:0:0"
Driver "fglrx"
Option "ForceMonitors" "lvds,crt1"
Option "Centermode" "off"
Option "VideoOverlay" "on"
Option "OpenGLOverlay" "off"
Option "OverlayOnCRTC2" "0"
Option "PseudoColorVisuals" "off"
Option "HSync2" "31-64"
Option "VRefresh2" "56-75"
Option "UseFastTLS" "off"
Option "Mode2" "1280x1024,1024x768,800x600,640x480"
Option "TexturedVideo" "on"

I can add whatever other information is needed to assist others. I have no problems with running VO.