i had exactly the same problem 
it's look like it loaded the xgl driver instead the normal radeon driver 
after i removed the xserver-xgl package i get 
sudo glxinfo | grep rendering
direct rendering: Yes

and everything looks fine

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Thinkpad R51 with Radeon Mobility 7500 on Gutsy, poor performance and no 3D 
acceleration
https://bugs.launchpad.net/bugs/149708
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