With KMS enabled I've got much distortion in the terminal and X-server. Below I've put the details of some commands, what else is necessary? I've alse included a photograph of the distortion.

With "echo 1 | sudo tee /sys/module/drm/parameters/debug" the log is filling with these messages:
Nov  6 15:40:13 remco-laptop kernel: [ 1856.946911] [drm:drm_ioctl], pid=1102, cmd=0xc008646a, nr=0x6a, dev 0xe200, auth=1
Nov  6 15:40:13 remco-laptop kernel: [ 1856.946917] [drm:drm_ioctl], ret = fffffff0

lspci -vv: 

1:00.0 VGA compatible controller: ATI Technologies Inc Mobility Radeon HD 3400 Series (prog-if 00 [VGA controller])
	Subsystem: Toshiba America Info Systems Device ff1e
	Control: I/O+ Mem+ BusMaster+ SpecCycle- MemWINV- VGASnoop- ParErr- Stepping- SERR- FastB2B- DisINTx+
	Status: Cap+ 66MHz- UDF- FastB2B- ParErr- DEVSEL=fast >TAbort- <TAbort- <MAbort+ >SERR- <PERR- INTx-
	Latency: 0
	Interrupt: pin A routed to IRQ 46
	Region 0: Memory at c0000000 (32-bit, prefetchable) [size=256M]
	Region 1: I/O ports at 5000 [size=256]
	Region 2: Memory at d6300000 (32-bit, non-prefetchable) [size=64K]
	Expansion ROM at d6320000 [disabled] [size=128K]
	Capabilities: <access denied>
	Kernel driver in use: radeon
	Kernel modules: radeon