From the attached: (--) RADEON(0): Chipset: "ATI Radeon Mobility M7 LW (AGP)" (ChipID = 0x4c57)
(II) RADEON(0): Output LVDS using initial mode 1024x768
(II) RADEON(0): Front buffer size: 3072K
(II) RADEON(0): VRAM usage limit set to 25804K
..it looks like the radeon driver is being used.
..but: (EE) AIGLX error: dlopen of /usr/local/lib/X11/modules/dri/radeon_dri.so failed (/usr/local/lib/X11/modules/dri/radeon_dri.so: cannot open shared object file: No such file or directory
(EE) AIGLX: reverting to software rendering
(II) AIGLX: Screen 0 is not DRI capable
I guess this is because Xorg-7.6-3d is not loaded - what does the following give: $ ldd /usr/local/lib/X11/modules/dri/radeon_dri.so | grep found
I forget the exact format required in xorg.conf to change the resolution from 1024x768 to 800x600, but you should find an example in these forums or the xorg man pages.