I attempted to move to 2.6.33rc8 using the Ubuntu packages from ppa and find that radeon reverts to software rendering. I'm using radeon packages from xorg-edgers. The last 2.6.33 build to work fine was rc6. With rc7 radeon also falls back to software rendering. No messages in Xorg.0.log other than the usual "direct rendering is disabled" type entries.
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Radeon falling to software rendering with 2.6.33rc8