My previous graphic card was a radeon 9600 pro and it was working fine, try to enable renderaccel:
Option "RenderAccel" "true"
Also remove comment out other non-vital lines like:
Option "backingstore" "true"
Option "AllowGLXWithComposite" "true"
Also you have duplicated entries, did you use aticonfig for configuring xorg.conf? Next time don't it messes up you xorg.conf
Instead use other X configuration tool like sax2 or whathever your distro has.