Unfortunately, this is not my experience. Just this summer I installed Ubuntu 10.04 desktop on a computer running a relatively new ATI card (It was top of the line a couple years ago, I believe). While in general use its fine, there are plenty of really annoying issues. Unfortunately for us, as we were attempting to use it as a media center, there were significant issues with full screen video, where it would freeze up for 5 - 10 seconds at a time every minute or two. This is a known issue for the entire series of cards, and is a driver bug, but hasn't been fixed in the 1+ year that the issue has been open. Then there are other smaller issues with the card such as a 5 second delay maximizing a window, if you're using compiz. Not a deal killer, but still annoying, and there were a few similar bugs like this. After this incredibly sour experience with ATI, I'm not sure I'll recommend them again for a long time. And I haven't even gotten into how long I had to fight with X just to get dual monitors to work.
At some arbitrary time in the past I did use the xorg server from this ppa https://launchpad.net/~ubuntu-x-swat/+archive/xserver-no-bac... when I was using compiz and things were slow on an ati card. I dont know if that ppa is updated for lucid but you could give it a try. If youre using it as a htpc you can disable compiz no ? I mean in most cases wouldnt you want to directly boot into mythtv / xbmc ? Also can you specify what card are you using ? If its x1xxx series or earlier then youre beyond the support window (the closed source driver is only for newer cards) and you might be better off using the radeonhd driver. I think I should do a write up on how to setup ati drivers on linux the right way. It takes < 5 mins to get a dual head display with auto detection going these days. HINT: aticonfig is your friend.
(Written on a Macbook Pro running Ubuntu 10.04)