a) Nexuiz works pretty well, but might be a bit slow on higher settings (I only ever tested Nexuiz on the APU graphics with Catalyst 11.4. Afterwards used only the dedicated card and it was pretty fast there).
b) For my hardware, the open source drivers work pretty well. 2D was quite fast before but seems to be little slow in the latest git versions. You should use as recent a Linux kernel as possible (preferably Linux 3.2 although 3.1 might be OK). Also, suspend isn't working properly on my laptop right now (i.e no display on resuming). 3D games run pretty slow on the integrated graphics card as expected.
c) Well, 2D sucks but 3D rocks. Also, the newer proprietary drivers don't work with Gnome 3. In my laptop, same problem with suspending as with open source drivers. Catalyst 11.8 seems to be the best thing to run IMO.