I am not sure about anyone else here but i have good luck with nvidea. I run a really low budget system and have just decided to use the nvidea proprietary drivers and have had NO issues using compiz. NOTE : why KDE why not xfce so much faster imo. that's my food stamps worth

It seems to me that the nvidia propriety driver beats the ati propriety driver. However if you compare the open source drivers, the radeonhd driver will allow you to use compositing effects. AMD/ATI have been opening up as much of the API and code as they can, so the OS driver may be quite good in a year or so. There may be a flip-flop in recommendation in the future, we just need to be patient I guess. If you have an older video device that is no longer supported, and you have to use the open source driver, my recommendation is ATI and the radeonhd driver.
You can use KDE 4's composite effects using this driver, which you can't using the nv driver.

well I am not so sure about that. In my set up ( which is low budget ega nvidea 5200 fx w/128mb dual 250mhz clock 1.7ghz p4 512 mb ram) runs xfce4 under slack 12.2 with compiz ( composting ) with no issues that i cant fix. As an added tool nvidea gives you a way of editing your xorg.conf file via the there device options tool. this was installe 3 days ago. I believe this is a new beta driver release which covers most of the boards up to series 8 i think.
Edit: one thing i have noticed is video "tearing" which i think is just a setting i have to correct. will post back on this. the nice thing about the nvidea driver was the ease of install and set up. it makes its own module at compile time for YOUR kernel....not a default one that you have to edit the ./config or make file for. I have seen some other post regarding nvidea that also show you can get even high performance ( X4) by getting rid of some modules in the xorg.conf loads. My personal choice is nvidea.

I agree that for binary drivers, nvidia is better.

But it's not 100% true that the free drivers for ati will work any better than the nvidia ones for everyone and for every user. I must clear up one thing (and a very important one I might add). *TODAY*, the open source ATi drivers are better than the nvidia one *only* if you use an old card. Anything r600 based and above has no 3d acceleration yet. You can get some initial support for dri for r600-r700 cards with the latest .31 kernel and using mesa and libdrm from git, but it's highly unstable, for me it causes an horrid amount of cpu waste, and it doesn't work for most programs. The can even cause hard locks sometimes, which means a forced reboot (some times not even the sysrq combos will work).

Besides that, getting radeon to work has been problematic, though a big part of it could be that my card is agp based according to some info from the mailing list.

Better support is supposed to be on linux 2.6.32 and with the next xorg generation, but that can take some time, who knows. And even then, we can be sure how much "better" will it be. If you have an ati r5xx based card then you are going to be happy with the radeon driver, but modern cards will not work to their full potential with that driver, which means that your only option for 3d is the proprietary driver (just like with nvidia).

Tomorrow anything can happen, but I am talking about *now*.