Open Source ATI Driver and HDMI support

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http://askubuntu.com – I have an ATI Radeon HD 3600 and I installed Ubuntu 12.10 a few months ago. Since then, I've been looking for some way to make HDMI work, as the proprietary drivers do not work with the new Xorg. Recently, I came across this post from 2007. Am I missing something? Is it possible to make HDMI sound work with the open source ATI driver? Is there some work around without having to install some obscure kernel or unsupported PPA? When a perform a lspci, I do get a line 01:00.1 Audio device: Advanced Micro Devices [AMD] nee ATI RV635 HDMI Audio [Radeon HD 3600 Series] which tells me that it can (HowTos)