Sure it does, but i think there are no specs available or something such, and thus no XV support, at least i did not find any such stuff in current XFree86 HEAD CVS. There may be some support with the GATOS drivers or something such.
Well, it seems to me that we all, michel daenzer's server users are already using the gatos project's driver. And, it seems from what I read on their site, that as long as there are no specs released from ati, this isn't supported by the Xv extension, as it could.
I also don't get anything about motion compensation in xdpyinfo and mplayer complains that
libmpeg2: No accelerated IDCT transform found libmpeg2: No accelerated motion compensation found marc