This page describe steps needed to compile open source r500 driver 
Installation is done on IBM T60 laptop  with 1400x1200 LCD on current Debian unstable.
# prerequesits from packages
sudo apt-get install xserver-xorg-dev

# libpciexpress
git clone git://anongit.freedesktop.org/git/xorg/lib/libpciaccess
cd libpciaccess/
./autogen.sh
make
sudo make install

# checkout source
git clone git://anongit.freedesktop.org/git/avivo/xf86-video-avivo
cd xf86-video-avivo/
./autogen.sh
./configure --prefix /usr
make
sudo make install

Then, I needed to add my card PCI ID to driver: avivo‑m52‑pci‑id.diff 
$ lspci -nn | grep ATI
01:00.0 VGA compatible controller [0300]: ATI Technologies Inc M52 [ATI Mobility Radeon X1300] [1002:7149]

After that, I changed /etc/X11/xorg.conf to include
Section "Device"
        Identifier  "aticonfig-Device[0]"
        Driver      "avivo"
EndSection

It does find card, but screen screwed and cursor has strange artifacts.

Here is a log file: Xorg.1.log