Im using an Packard Bell easynote TJ75 with a ati mobility radeon HD5650, and its not bad at all.
Compiz benchmark is around 500~600 frames/sec, i can play good World of Warcraft or Call of duty MW 4 (under wine), for example (well, there is some slowdown sometimes).
BTW, im using the experimental drivers:
deb http://ppa.launchpad.net/ubuntu-x-swat/x-updates/ubuntu lucid main
deb-src http://ppa.launchpad.net/ubuntu-x-swat/x-updates/ubuntu lucid main
http://keyserver.ubuntu.com:11371/pks/lookup?op=get&search=0x3B22AB97AF1CDFA9
Sometimes compiz has some issue (for example, does not load the windows icons, minimixe, maximize and close), but i dont know if this is really related with the ati card.
I have an ati on my desktop too, with ubuntu 9.10 no kind of driver used to works, with ubuntu 10.04 it works perfectly.
Here's a screenshot for you, with the compiz expo effect:
As you see, ati card and drivers does not work bad at all.
This document explains how to install
and use the open-source radeonhd
drivers on Ubuntu. This shouldn't be
necessary... unless you're having
problems with the open-source
"ati/radeon" driver that comes
pre-installed with Ubuntu.pre-installed with Ubuntu.
https://help.ubuntu.com/community/RadeonHD
EDIT: As JanC pointed out, you shouldn't install the RadeonHD driver if the pre-installed driver works.
Best Answer
They have improved a lot. And there is not big disadvantage to enabling them. But if you are happy without them, save yourself some potential trouble.