Great news! At last, ATI has fixed the displacement mapping bug. Now you can do vertex texture fetching in your vertex shaders with a Radeon! And GPU Caps Viewer is happy:
More information about vertex displacement mapping here: Vertex Displacement Mapping in GLSL Now Available on Radeon!.
You can grab the Catalyst 8.10 BETA from here: Catalyst 8.10 BETA.
I wonder if ATI will write this bugfix in the release notes… Anyway guys, this new release of Catalyst seems to be a great version…
Here are the screenshots of my Radeon HD 4850 and Catalyst 8.10 BETA under XP32: