Building drm.ko and radeon.ko according to: 
 http://wiki.x.org/wiki/radeonhd%3Ar6xx_r7xx_branch

and depmod -a (and rmmod fglrx) before modprobe drm && modprobe radeon

and having xorg.conf
Section "Screen"
        Identifier      "Configured Screen Device"
        Device  "Configured Video Device"
        SubSection "Display"
                Virtual 5040 1050
        EndSubSection
EndSection

Section "Device"
        Identifier      "Configured Video Device"

    Driver "radeonhd"
    Option "AccelMethod" "exa"
    Option "DRI" "on"
EndSection

and using either Tormod Volden's or Bryce Harrington's latest ppa still
gives me very slow screen updates with sound cutting out when I drag a
window around.

Am I missing something or do I just need to be patient for another week
or so?

My graphics reports as: ATI Technologies Inc RS780M/RS780MN [Radeon HD
3200 Graphics] rev 0, Mem @ 0xc0000000/268435456, 0xd6400000/65536,
0xd6300000/1048576, I/O @ 0x00005000/256

-- 
FFe:  Xv and EXA not supported on R6xx/R7xx chipsets
https://bugs.launchpad.net/bugs/334101
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