XFree86 4.3.0 Released
Dunkalis writes "The latest version of XFree86, 4.3.0, has been released! Release notes here, mirrors here. Enhancements include drivers for newer Radeons, better PS/2 protocol detection, the XRandR extension, better font support, and more!" Source tarballs are available, or wait for your distribution to package them...
You were using SOFTWARE rendering. Which inherently is going to be very very slow. When you installed Nvidia's drivers, you were using their HARDWARE rendering support.
Sunny Dubey
Random Note: glxgears IS NOT a bench marking tool. Nvidia's drivers are highly optimized for display lists which is why comparing glxgear fps numbers will ALWAYS be skewed.