ATI driver issues and slow video playback

Question

I just reinstalled Arch and I installed the ATI drivers, at first I couldn't get them working but when I did, video in full screen was amazingly slow, so I tried installing ati-drivers-arch, as someone in the boards suggested but after that each time I start X, it would crash my computer, so right now I am using the standard vesa driver to even start X.
Also when trying to resize mplayer (while using -vo gl) it says my computer is too slow. And VLC has no speed issues but the quality of the picture is very poor.
I am running:
AMD Athlon 64 3200+
ATI Radeon X800 GTO
1.5 gb of DDR RAM
# File generated by xorgconfig.
# Copyright 2004 The X.Org Foundation
# Permission is hereby granted, free of charge, to any person obtaining a
# copy of this software and associated documentation files (the "Software"),
# to deal in the Software without restriction, including without limitation
# the rights to use, copy, modify, merge, publish, distribute, sublicense,
# and/or sell copies of the Software, and to permit persons to whom the
# Software is furnished to do so, subject to the following conditions:
# The above copyright notice and this permission notice shall be included in
# all copies or substantial portions of the Software.
# THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR
# IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY,
# FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT.  IN NO EVENT SHALL
# The X.Org Foundation BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER LIABILITY,
# WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF
# OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE
# SOFTWARE.
# Except as contained in this notice, the name of The X.Org Foundation shall
# not be used in advertising or otherwise to promote the sale, use or other
# dealings in this Software without prior written authorization from
# The X.Org Foundation.
# Refer to the xorg.conf(5x) man page for details about the format of
# this file.
# Module section -- this  section  is used to specify
# which dynamically loadable modules to load.
Section "Module"
# This loads the DBE extension module.
    Load        "dbe"      # Double buffer extension
# This loads the miscellaneous extensions module, and disables
# initialisation of the XFree86-DGA extension within that module.
    SubSection  "extmod"
      Option    "omit xfree86-dga"   # don't initialise the DGA extension
    EndSubSection
# This loads the font modules
#    Load        "type1"
#    Load        "speedo"
    Load        "freetype"
#    Load        "xtt"
# This loads the GLX module
    Load       "glx"
# This loads the DRI module
#    Load       "dri"
EndSection
# Files section.  This allows default font and rgb paths to be set
Section "Files"
# The location of the RGB database.  Note, this is the name of the
# file minus the extension (like ".txt" or ".db").  There is normally
# no need to change the default.
    RgbPath    "/usr/share/X11/rgb"
# Multiple FontPath entries are allowed (which are concatenated together),
# as well as specifying multiple comma-separated entries in one FontPath
# command (or a combination of both methods)
    FontPath   "/usr/share/fonts/misc"
    FontPath   "/usr/share/fonts/75dpi"
    FontPath   "/usr/share/fonts/100dpi"
    FontPath   "/usr/share/fonts/TTF"
    FontPath   "/usr/share/fonts/Type1"
#    FontPath   "/usr/lib/X11/fonts/local/"
#    FontPath   "/usr/lib/X11/fonts/misc/"
#    FontPath   "/usr/lib/X11/fonts/75dpi/:unscaled"
#    FontPath   "/usr/lib/X11/fonts/100dpi/:unscaled"
#    FontPath   "/usr/lib/X11/fonts/Speedo/"
#    FontPath   "/usr/lib/X11/fonts/Type1/"
#    FontPath   "/usr/lib/X11/fonts/TrueType/"
#    FontPath   "/usr/lib/X11/fonts/freefont/"
#    FontPath   "/usr/lib/X11/fonts/75dpi/"
#    FontPath   "/usr/lib/X11/fonts/100dpi/"
# The module search path.  The default path is shown here.
#    ModulePath "/usr/lib/modules"
EndSection
# Server flags section.
Section "ServerFlags"
# Uncomment this to cause a core dump at the spot where a signal is
# received.  This may leave the console in an unusable state, but may
# provide a better stack trace in the core dump to aid in debugging
#    Option "NoTrapSignals"
# Uncomment this to disable the <Ctrl><Alt><Fn> VT switch sequence
# (where n is 1 through 12).  This allows clients to receive these key
# events.
#    Option "DontVTSwitch"
# Uncomment this to disable the <Ctrl><Alt><BS> server abort sequence
# This allows clients to receive this key event.
#    Option "DontZap"
# Uncomment this to disable the <Ctrl><Alt><KP_+>/<KP_-> mode switching
# sequences.  This allows clients to receive these key events.
#    Option "Dont Zoom"
# Uncomment this to disable tuning with the xvidtune client. With
# it the client can still run and fetch card and monitor attributes,
# but it will not be allowed to change them. If it tries it will
# receive a protocol error.
#    Option "DisableVidModeExtension"
# Uncomment this to enable the use of a non-local xvidtune client.
#    Option "AllowNonLocalXvidtune"
# Uncomment this to disable dynamically modifying the input device
# (mouse and keyboard) settings.
#    Option "DisableModInDev"
# Uncomment this to enable the use of a non-local client to
# change the keyboard or mouse settings (currently only xset).
#    Option "AllowNonLocalModInDev"
EndSection
# Input devices
# Core keyboard's InputDevice section
Section "InputDevice"
    Identifier    "Keyboard1"
    Driver    "kbd"
# For most OSs the protocol can be omitted (it defaults to "Standard").
# When using XQUEUE (only for SVR3 and SVR4, but not Solaris),
# uncomment the following line.
#    Option     "Protocol"      "Xqueue"
    Option "AutoRepeat" "500 30"
# Specify which keyboard LEDs can be user-controlled (eg, with xset(1))
#    Option    "Xleds"      "1 2 3"
#    Option "LeftAlt"     "Meta"
#    Option "RightAlt"    "ModeShift"
# To customise the XKB settings to suit your keyboard, modify the
# lines below (which are the defaults).  For example, for a non-U.S.
# keyboard, you will probably want to use:
#    Option "XkbModel"    "pc105"
# If you have a US Microsoft Natural keyboard, you can use:
#    Option "XkbModel"    "microsoft"
# Then to change the language, change the Layout setting.
# For example, a german layout can be obtained with:
#    Option "XkbLayout"   "de"
# or:
#    Option "XkbLayout"   "de"
#    Option "XkbVariant"  "nodeadkeys"
# If you'd like to switch the positions of your capslock and
# control keys, use:
#    Option "XkbOptions"  "ctrl:swapcaps"
# These are the default XKB settings for Xorg
#    Option "XkbRules"    "xorg"
#    Option "XkbModel"    "pc105"
#    Option "XkbLayout"   "us"
#    Option "XkbVariant"  ""
#    Option "XkbOptions"  ""
#    Option "XkbDisable"
    Option "XkbRules"    "xorg"
    Option "XkbModel"    "dell101"
    Option "XkbLayout"    "us"
EndSection
# Core Pointer's InputDevice section
Section "InputDevice"
# Identifier and driver
    Identifier    "Mouse1"
    Driver    "mouse"
    Option "Protocol"    "PS/2"    # PS/2 Mouse
    Option "Device"      "/dev/psaux"
# When using XQUEUE, comment out the above two lines, and uncomment
# the following line.
#    Option "Protocol"    "Xqueue"
# Mouse-speed setting for PS/2 mouse.
#    Option "Resolution"    "256"
# Baudrate and SampleRate are only for some Logitech mice. In
# almost every case these lines should be omitted.
#    Option "BaudRate"    "9600"
#    Option "SampleRate"    "150"
# Mouse wheel mapping.  Default is to map vertical wheel to buttons 4 & 5,
# horizontal wheel to buttons 6 & 7.   Change if your mouse has more than
# 3 buttons and you need to map the wheel to different button ids to avoid
# conflicts.
    Option "ZAxisMapping"   "4 5 6 7"
# Emulate3Buttons is an option for 2-button mice
# Emulate3Timeout is the timeout in milliseconds (default is 50ms)
    Option "Emulate3Buttons"
#    Option "Emulate3Timeout"    "50"
# ChordMiddle is an option for some 3-button Logitech mice
#    Option "ChordMiddle"
EndSection
# Other input device sections
# this is optional and is required only if you
# are using extended input devices.  This is for example only.  Refer
# to the xorg.conf man page for a description of the options.
# Section "InputDevice"
#    Identifier  "Mouse2"
#    Driver      "mouse"
#    Option      "Protocol"      "MouseMan"
#    Option      "Device"        "/dev/mouse2"
# EndSection
# Section "InputDevice"
#    Identifier "spaceball"
#    Driver     "magellan"
#    Option     "Device"        "/dev/cua0"
# EndSection
# Section "InputDevice"
#    Identifier "spaceball2"
#    Driver     "spaceorb"
#    Option     "Device"        "/dev/cua0"
# EndSection
# Section "InputDevice"
#    Identifier "touchscreen0"
#    Driver     "microtouch"
#    Option     "Device"        "/dev/ttyS0"
#    Option     "MinX"          "1412"
#    Option     "MaxX"          "15184"
#    Option     "MinY"          "15372"
#    Option     "MaxY"          "1230"
#    Option     "ScreenNumber"  "0"
#    Option     "ReportingMode" "Scaled"
#    Option     "ButtonNumber"  "1"
#    Option     "SendCoreEvents"
# EndSection
# Section "InputDevice"
#    Identifier "touchscreen1"
#    Driver     "elo2300"
#    Option     "Device"        "/dev/ttyS0"
#    Option     "MinX"          "231"
#    Option     "MaxX"          "3868"
#    Option     "MinY"          "3858"
#    Option     "MaxY"          "272"
#    Option     "ScreenNumber"  "0"
#    Option     "ReportingMode" "Scaled"
#    Option     "ButtonThreshold"       "17"
#    Option     "ButtonNumber"  "1"
#    Option     "SendCoreEvents"
# EndSection
# Monitor section
# Any number of monitor sections may be present
Section "Monitor"
    Identifier  "ati"
# HorizSync is in kHz unless units are specified.
# HorizSync may be a comma separated list of discrete values, or a
# comma separated list of ranges of values.
# NOTE: THE VALUES HERE ARE EXAMPLES ONLY.  REFER TO YOUR MONITOR'S
# USER MANUAL FOR THE CORRECT NUMBERS.
    HorizSync   31.5 - 48.5
#    HorizSync    30-64         # multisync
#    HorizSync    31.5, 35.2    # multiple fixed sync frequencies
#    HorizSync    15-25, 30-50  # multiple ranges of sync frequencies
# VertRefresh is in Hz unless units are specified.
# VertRefresh may be a comma separated list of discrete values, or a
# comma separated list of ranges of values.
# NOTE: THE VALUES HERE ARE EXAMPLES ONLY.  REFER TO YOUR MONITOR'S
# USER MANUAL FOR THE CORRECT NUMBERS.
    VertRefresh 50-70
EndSection
# Graphics device section
# Any number of graphics device sections may be present
# Standard VGA Device:
Section "Device"
    Identifier    "Standard VGA"
    VendorName    "Unknown"
    BoardName    "Unknown"
# The chipset line is optional in most cases.  It can be used to override
# the driver's chipset detection, and should not normally be specified.
#    Chipset    "generic"
# The Driver line must be present.  When using run-time loadable driver
# modules, this line instructs the server to load the specified driver
# module.  Even when not using loadable driver modules, this line
# indicates which driver should interpret the information in this section.
    Driver     "vga"
# The BusID line is used to specify which of possibly multiple devices
# this section is intended for.  When this line isn't present, a device
# section can only match up with the primary video device.  For PCI
# devices a line like the following could be used.  This line should not
# normally be included unless there is more than one video device
# intalled.
#    BusID      "PCI:0:10:0"
#    VideoRam    256
#    Clocks    25.2 28.3
EndSection
# Device configured by xorgconfig:
Section "Device"
    Identifier  "ati1"
    Driver      "vesa"
    # unsupported card
    VideoRam    262144
    # Insert Clocks lines here if appropriate
EndSection
# Screen sections
# Any number of screen sections may be present.  Each describes
# the configuration of a single screen.  A single specific screen section
# may be specified from the X server command line with the "-screen"
# option.
Section "Screen"
    Identifier  "Screen 1"
    Device      "ati1"
    Monitor     "ati"
    DefaultDepth 24
    Subsection "Display"
        Depth       8
        Modes       "1280x1024" "1024x768" "800x600" "640x480"
        ViewPort    0 0
    EndSubsection
    Subsection "Display"
        Depth       16
        Modes       "1280x1024" "1024x768" "800x600" "640x480"
        ViewPort    0 0
    EndSubsection
    Subsection "Display"
        Depth       24
        Modes       "1280x1024" "1024x768" "800x600" "640x480"
        ViewPort    0 0
    EndSubsection
EndSection
# ServerLayout sections.
# Any number of ServerLayout sections may be present.  Each describes
# the way multiple screens are organised.  A specific ServerLayout
# section may be specified from the X server command line with the
# "-layout" option.  In the absence of this, the first section is used.
# When now ServerLayout section is present, the first Screen section
# is used alone.
Section "ServerLayout"
# The Identifier line must be present
    Identifier  "Simple Layout"
# Each Screen line specifies a Screen section name, and optionally
# the relative position of other screens.  The four names after
# primary screen name are the screens to the top, bottom, left and right
# of the primary screen.  In this example, screen 2 is located to the
# right of screen 1.
    Screen "Screen 1"
# Each InputDevice line specifies an InputDevice section name and
# optionally some options to specify the way the device is to be
# used.  Those options include "CorePointer", "CoreKeyboard" and
# "SendCoreEvents".
    InputDevice "Mouse1" "CorePointer"
    InputDevice "Keyboard1" "CoreKeyboard"
EndSection
# Section "DRI"
#    Mode 0666
# EndSection
A big thank you to anyone who can help!

Answer 1

It doesn't look like xorg 7 has been installed.  The latest kernel 2.6.15 needs xorg 7, udev, and initrd .
I may be wrong but my xorg is much smaller in size and fonts are handled differently in the latest kernels. 
Please see the blogs concerning the upgrades to the xorg 7 changes.