While the Intel kernel mode-setting graphics driver entered the mainline Linux 2.6.29 kernel, and is beginning to become the default driver in various desktop Linux distributions, the KMS driver does not yet have a feature parity with the traditional DDX xf86-video-intel driver. However, announced on the DRI development list today is one more feature that has now been introduced into the kernel mode-setting driver and generic DRM mode-setting code. This is video overlay support for Intel hardware.
Daniel Vetter has pushed a set of six patches out onto the DRI development list that adds this kernel mode-setting support for Intel overlay. With this initial code there is currently a few bugs (image flickering for a short while) an Intel-specific ioctl, and some changes to the generic DRM code. These patches can be found on dri-devel
and perhaps these patches adding this overlay support will be ready in time for the Linux 2.6.32 kernel.