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If there's really an old-school overlay there, then why doesn't the driver expose it? I know it doesn't work in a composited environment, but still, open source drivers usually strive to support everything the hardware is capable of.
The intel driver still has overlay support, I can use it on my netbook. No, or negligible difference in CPU usage though. But I'll have to compare image quality, maybe the overlay uses better scaling than bilinear. Not that it matters much on a tiny netbook screen (8.9'', oh how I wish such netbooks were still being made, I would kill for a 8.9'' ValleyView netbook...)