I just ran emerge update world which switched me from Xfree86 to Xorg. Went fairly smooth, except that some fonts weren't anti-aliased afterward. I followed the instructions in Howto Xorg and Fonts which seemed to do the trick. Primarily:
emerge freetype corefonts freefonts artwiz-fonts sharefonts \ terminus-font ttf-bitstream-vera unifont
I did end up porting my XF86Config to the new xorg.conf based on xorg.conf.example, You can get it here. (however the only real change was the inclusion of more font paths, so it was mostly academic). Still if you have an IBM R40 with the ATI Radeon 7500 and a 1400x1050 display, and want the built in trackpoint to work simultaneous with a standard logitech usb wheelmouse, then the xorg.conf should work well for you.
It appears that keyboard repeat rate is slow, on first start I was asked whether to use X's keyboard startup or Gnomes. I chose Gnome's, so perhaps I just need to tweak settings. I decreased the delay between repeat, and increased the repeat rate to fastest, and it appears to help, but it slows down the repeat after about 5 characters.
I have updated this and other information on my Gentoo R40 Wiki page.
