Now that libdrm-radeon1 is in unstable, I just uploaded a snapshot of the radeon driver to experimental (xserver-xorg-video-radeon package version 1:6.12.99+git20100201.a887818f-1). So you may now get KMS and DRI2 working, assuming you have a recent kernel (I am running 2.6.32-trunk-686 here). This driver even contains some early support for r8xx boards.
To check whether KMS is working, look for radeon kernel modesetting in dmesg. To check whether DRI2 is working, look for DRI2 in /var/log/Xorg.0.log.
Make sure the radeon kernel module is loaded early (which means: don't let X load it late in the boot, otherwise you may experience this bug). I had to add radeon to /etc/modules and put options radeon modeset=1 in /etc/modprobe.d/. In the past, I also needed agpmode=-1 there but it didn't seem to make any difference with latest packages.
Then, actual DRI2 support requires Mesa packages rebuilt against libdrm-radeon1. This is in experimental as well now. Look for libgl1-mesa-dri and other Mesa packages version 7.7-3.
Don't forget that these packages are in experimental for a good reason, they may not work. But at least basic things seem to work fine on my Radeon X300 (rv370). And don't forget that the X team needs help, otherwise these packages may never make it to unstable...