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waqas300, please restart your machine after installing fglrx to make sure that the "radeon" kernel module is not loaded, as it will interfere with FGLRX.
I've installed ati-driver-installer-11-9-x86.x86_64.run on my new 6850 today without problems. Older versions (for example from ubuntu 11.04) had problems with video being displayed on top of everything.
Also, I'm not sure how to enable PowerPlay in cccle, so I've written a small script to save power and noise.
I really wish that AMD folks include some kind of check and print a Xorg error message if thats the case.