hey there, i'm having the same problem, also with radeonhd 1.2.5 . I have an integrated radeon HD3200 (RV610). From what i understand from this thread on phoronix: http://www.phoronix.com/forums/showthread.php?t=16368 in order to have XV, DRI and EXA working we need the updated DRM which is present in kernel 2.6.30 . Unfortunately i can't boot the -rc1 kernel because it doesn't see anymore my raid arry so i can't test this. Also looking at my Xorg.log i found this: (WW) RADEON(0): Option "XaaNoOffscreenPixmaps" is not used So my guess is that XAA accelaration was probably disabled and that's why now everything is so slow. It looks like a severe regression to me.
i hope this helps someway p.s. this bug report on launchpad maybe helpful too: https://bugs.launchpad.net/ubuntu/+source/xserver-xorg-video-ati/+bug/334101
