I haven't used an ATI in Linux for a few years, but I had a Mobility Radeon that did the old Beryl perfectly, I see no reason why a HD wouldn't do it.
You'd need the proprietary drivers, which are easy to obtain if you're using Ubuntu. If you're not (and I hope you're not), then they're just as easy to find in the distro's repositories. Arch, for example, simply has the 'nvidia' and 'ati' packages.

This is a fairly old review but may give you some info you need.

Yeah, I found that...and it looks that the end result is that it works. But I wanted to see if anyone was currently using this and could tell me :) Thanks though!

I've got a ATI HD 4350 on one of my linux boxes using the proprietary ATI drivers and it works great for me, I don't play games on that box though and don't do much that requires 3d. The ATI drivers where very easy to setup and seem to work very well though.