EVERYTHING works fine in my OS, from full-screen flash/videos to no window/GUI lag to even non-Steam games (2D/3D) that work fantastic.
However, when I play a game like Half-Life, or even Osmos (2D, but using 3D particle effects), I'm greeted to a blank color that fills the screen, and my cursor left to wander around. Other games will have an odd resolution, and will only fill the bottom left quadrant of the screen. I have an ATI Radeon HD 6850 (1GB) card, and I upgraded to the exact drivers Steam recommended in a popup.
I'm running a 64-bit (derivative of) Ubuntu 12.04 if that helps.