Since I had a lot of trouble with these things, I'll post it here for others which may be as innocent as I was to those things.
Installing the drivers from the ATI repositories for 10.3 failed as posted before, so I installed version 8.40.4 with the Ati installer. Then I did an
After that you need to reboot your machine.
in a console you can check that the ATI driver is running (if there's no error message)
Then I tried to switch to Xgl via YaST which yielded serious problems. If you need to switch back to Xorg you can do that by executing
in a root shell and changing the entry Xgl back to Xorg (case sensitive).
Only after adding the "openSuSE 10.3 build service X11:Xorg" channel and installing compiz, compiz-emerald, opensuse-xgl-settings and executing the latter one in the graphical interface to enable xgl, everything worked well. Just to let you know, Xgl with compiz is awesome!