My problem with AMD proprietary graphics driver continues in Fedora 8. Fedora 8 ships with a 2.6.23.1-42 kernel and now has the latest kernel release as 2.6.23.1-49. Unfortunately AMD's 8.42.3 driver which supports AIGLX does not support 2.6.23.xx kernel. But there have been reports in the Phoronix Forums about some patches which are available which would make AMD 8.42.3 driver to work with 2.6.23.1-49 kernel. Also it seems like livna.org provides a fglrx driver specifically for Fedora 8 users which has support for 2.6.23 kernel. I installed the packages from livna and not so surprisingly those drivers did not provide improved performance. The livna packages had it own display configuration utility like the system-config-display called livna-config-display which I used to configure my display. The glxgears command returned a better frame rate with the radeon driver than with the fglrx driver from livna. The display was weird with all the font/icons appearing really really small. Enabling desktop effects resulted in a white screen of death for me. All I saw was the white screen and nothing else. I had to kill the current session and had to log back in using a new session. So far the fglrx drivers from AMD has not worked well (at least the last 3 - 4 driver releases).

In case you were wondering how to add livna repositories, type the following command
$ su -c 'rpm -ivh http://rpm.livna.org/livna-release-8.rpm'
This would create the appropriate .repo files in /etc/yum/repos.d.