Well, glxgears does show you whether you are getting decent hardware acceleration or not. I've used it to see how the card is rendering 3D and if it's being done by software instead of the hardware. According to the site, your card should do hardware rendering with the open source driver. Not sure if the same is the case with ATI's fglrx driver (I've never had much success with that). For the record, you shouldn't have to add anything in the "Section 'Device'" portion of xorg.conf other than to specify that you're using the "radeon" driver.
Code:
Graphics Card | CPU | X version | Driver-Name | DRI? | GLX Server | Resolution | Depth | Notes | glxgears FPS
===================================================================================================================================
ATI X300 | Intel Pentium 2.8GHz HT | X.Org 7.1.1 | radeon | Yes | v1.2 | 1280x1024 | 24 | | 1550 FPS
Also note the disclaimer on the page (which reaffirms what I said):