ATI released Catalyst 10.6 drivers. The new drivers have several enhancements, especially video playback related.

Here is a breakdown of the new features available in the Catalyst 10.6 display driver release, snapped directly from the release notes:

GPU acceleration of H.264 video content using Adobe Flash Player 10.1

AMD GPU acceleration of Adobe Flash Player 10.1 delivers smooth high definition video playback and reduces system resource utilization
Adobe Flash Player 10.1 can be accelerated on notebook and desktop platforms featuring AMD graphics including:
ATI Radeon HD 5000 and ATI Radeon HD 4000 series
ATI Mobility ATI Radeon HD 400 series (and higher)
ATI Radeon HD 3000 series integrated graphics (and higher)