I think it has something to do with the fact that 3.8.1 forces kernal 2.6. In my (very limited ) experience kernal 2.4, which is the default in 3.7, plays much better with radeon cards. The problem is that 3.7 is now quite outdated(no UnionFS, outdated packages etc.). Mabye in the next release 2.4 will again be optional, just like 2.6 was. But again, I'm just guessing and I know that space is limited in a 700 mb disk. If anyone has any advice it would be greatly appreciated.