pointreyes said:
... 6 unknown devices in my Device Manager-MMC 7.7 is down since the 6 unknown devices were AIW stuff. Never again will I purchase an ATI product-ATI has finally lost me as a customer. I'm throughly sick with software as poor as this!!!! 
Only the 6094 drivers install correctly. None of the AIW stuff works-some improvement. All software was installed on top of the current software-in the case of the MMC that is what you are supposed to do.
Boy, it's been forever since I dusted off this account...
However, I can't say what you're doing wrong. I also have a Radeon 8500 DV and it's doing it's multi-media just as well, if not better than before. MPEG-2 capture is only using 30-35% of my resources. (I use 720x480, variable bit rate, VBR 15 M Bit/Sec, motion quality 100%, I frame only)
There's only 2 multi-media bugs that I found so far. One is the audio pass through locks up the DVD player (legacy problem for me) and the other is that when I uninstalled all the drivers and re-installed them, the compatability check is saying that my DX and WDM isn't installed correctly. (All is still well though...)
Overall, a fairly decent driver for what I do.
System:
Windows 2K Pro
Althon XP 1800+
Shuttle AK 31 Ver 3.1
256 MB of DDR 2100
Maxtor 80Gig 7200 RPM, ATA 133 drive
Sound Blaster Audigy Gamer
Most other stuff, irrelevent....