My thanks for all the comments.I tried the latest ATI driver 8.36.5 but the included check.sh shows the Xserver as 1.3.0 and there is no target for that.
In regard to the HP Nx 8420 itself, it is 3 months old, ACPI works on both the 2.6.18 and 2.6.20 kernels in the 686 and AMD64 versions.
Guess I'm just going to have to wait for it to be sorted out. I'm not sure I have the skills to go back to the previous X version.
Tim