I recently upgraded to KDE4 and it has been working well; however, I discovered that it exhibits the same "flickering" when attempting to watch video and trouble with GL screensavers that I found when trying to use Compiz in KDE3. It appears to be a problem with the current ATI driver (ati_8) in the repositories and compositing.
After reading some other posts in the forums, I had found that some people were having luck with the ati_9 driver in the testing section of the repositories (but they had not indicated whether they were using KDE4). I decided to give the testing driver a shot, and it did work at getting rid of the flickering in video

, but I've found that it has other (and more serious to me) issues

. I noticed that I had a lot of CPU usage while the desktop was idle (nothing open other than the compsiting-enabled desktop and a karamba widget) which I discovered was caused by X - usage was at about 75-80% on one core. I also found that trying to test using glxgears caused that app to hang with a blank screen. I then went on to check the settings within the KDE control center; choosing any of the choices under Look & Feel -> Desktop (such as Desktop Effects, Sceen Saver, etc) would cause the system to more-or-less hang. The mouse cursor showed a busy status, and you could move it around, but nothing could be clicked and nothing ever happen; I had to Ctrl+Alt+Backspace to regain control of the computer. I tried again after a reboot, but still with the same results.
I've decided to revert back to the current (ati_8) driver for now since those issues aren't as severe, but I wanted to know if anyone else is having success with an ATI video card with KDE4 compositing (and if so, how is yours set up). I also wanted to make those issues known that I had with the driver within testing.
My personal setup is ATI Radeon HD 3200 through onboard video (AMD 780 chipset). I am using the "radeonhd/fglrx" driver, which is identified as "ATI Radeon HD 2000 and later"; 3D and translucency are enabled. I have not modified my xorg.conf in any way, it is how XFdrake had configured it; if you'd like me to post it, just let me know.