It has been a while since talking specifically about ATI's Gallium3D
driver, but there is some good news coming out now for the driver that supports the ATI R300 through R500 (Radeon X1000) series hardware. Corbin Simpson, the developer that has largely been working on porting the 3D work from the classic Mesa driver to Gallium3D, has updated the Radeon Feature Matrix
page on the X.Org Wiki last night.
According to this update, the status of Gallium3D on ATI R300 through R500 hardware has changed from "TODO" and "WIP" to being "DONE" for the Softpipe pass-through and being "MOSTLY" for the core driver. The Softpipe pass-through is for using the software driver for operations where the hardware support is not implemented or not available. The core driver though is what's most important.
Hearing the R300-R500 Gallium3D core driver as being mostly done is certainly exciting, but don't expect to find this as an update to your distribution tomorrow. There is still certainly much tuning, testing, and other work that needs to go on to this Gallium3D driver as well as to Gallium3D in general and its state trackers before it will be entering the limelight. The ATI Gallium3D driver that supports the R600 and R700 (and R800) hardware is still being worked on as well.