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Yes, they've made progress lately, but by the time they have a good driver for R3XX/R4XX, R5XX will be out with a completely different architecture. Reverse engineered drivers are always going to have this lag problem. The simple truth is that most users don't care if their drivers are open source and the graphics companies aren't loosing sleep over this issue.
ATI's closed source drivers SHOULD be a lot better than they are. This would be excusable if they provided specs, but they don't anymore. At least nvidia puts significant effort into their Linux drivers. Supporting ATI because somebody was able to figure out the R3XX architecture in spite of ATI basically rewards ATI for its non-commitment to Linux.