Thanks goes to Nick for sending me a note that DRI CVS has added hardware accelerated 3d for the Radeon in their latest release. Here's what they said about it:
Instructions for checking out the current DRI CVS code base can be found here.
I've just finished merging the latest ATI Radeon and Rage 128 work onto the trunk. This work adds 3D support for the Radeon cards and enhances 3D support for Rage 128 cards as well. You should be able check out the code from the DRI CVS trunk. Please let us know how it works for you.
Instructions for checking out the current DRI CVS code base can be found here.