The memset hack is probably right.  The cursor hack probably needs to be
replicated in the kernel.

diff -up xf86-video-ati-6.12.2/src/radeon_cursor.c.jx xf86-video-ati-6.12.2/src/radeon_cursor.c
--- xf86-video-ati-6.12.2/src/radeon_cursor.c.jx	2009-05-21 13:56:38.000000000 -0400
+++ xf86-video-ati-6.12.2/src/radeon_cursor.c	2009-05-21 13:56:39.000000000 -0400
@@ -372,7 +372,7 @@ Bool RADEONCursorInit(ScreenPtr pScreen)
 		       (unsigned int)radeon_crtc->cursor_offset);
 	}
 	/* set the cursor mode the same on both crtcs to avoid corruption */
-	if (IS_AVIVO_VARIANT)
+	if (IS_AVIVO_VARIANT && !info->drm_mode_setting)
 	    OUTREG(AVIVO_D1CUR_CONTROL + radeon_crtc->crtc_offset,
 		   (AVIVO_D1CURSOR_MODE_24BPP << AVIVO_D1CURSOR_MODE_SHIFT));
     }
diff -up xf86-video-ati-6.12.2/src/radeon_driver.c.jx xf86-video-ati-6.12.2/src/radeon_driver.c
--- xf86-video-ati-6.12.2/src/radeon_driver.c.jx	2009-05-21 13:56:38.000000000 -0400
+++ xf86-video-ati-6.12.2/src/radeon_driver.c	2009-05-21 13:59:08.000000000 -0400
@@ -3911,8 +3911,9 @@ Bool RADEONScreenInit(int scrnIndex, Scr
     }
 
     /* Clear the framebuffer */
-    memset(info->FB + pScrn->fbOffset, 0,
-           pScrn->virtualY * pScrn->displayWidth * info->CurrentLayout.pixel_bytes);
+    if (!info->drm_mode_setting)
+	memset(info->FB + pScrn->fbOffset, 0,
+	       pScrn->virtualY * pScrn->displayWidth * info->CurrentLayout.pixel_bytes);
 
     /* set the modes with desired rotation, etc. */
     pScrn->pScreen = pScreen;