good news i finally got this working correctly. i follow some different steps i found on another site. here is the link i hope someone finds it useful.
Ati Driver In Opensuse 11.3 - PC Pitstop Forums
please note: please follow the instructions exactly including using zypper to install the rpm (instead of rpm -ivh for example). also note my install froze at 94%. i went to another terminal and i found ‘hwinfo’ was using 100% cpu. i did ‘killall -9 hwinfo’ several times and then it completed successfully.
compositing was broken/disabled after installing the new driver. the work around i found is to go under ‘personal settings (configure desktop)’ > desktop > advanced and check box ‘disable functionality checks’ and now all seems to be working correctly.
update: i had some other issues too… i eventually fixed all the problems by moving ~/.kde4 out of my home directory so that it would be re-created the next time i logged on. that fixed compositing and missing effects and some other things… then i moved some of the configs back one at a time as needed (to make sure it didn’t cause problems). i still had to go back and disable checks for compositing to start working though. i don’t know what exactly was messed up but it was an easy work around for me.