Using 2009-09-09 ISO, when passing 'radeon.modeset=1' as boot param, I get "Unknown boot option 'radeon.modeset=1'. Ignoring..." Is that expected?
In the end you still might have modesettings enabled. What dmesg gives you ? something like :
/var/log/dmesg |grep drm
I red somewhere about a space after this argument, i'm not sure it help but you can try.
'radeon.modeset=1' to 'radeon.modeset=1 '
regards Flo