Downgrading from 10.1 to this version worked perfectly for me, and I'm now able to play /indev/ without any problems. (minus a few minor graphical glitches which do not affect gameplay at all) Simply start the installer, choose to deinstall your current drivers and once that's done start the installer again and this time you install the actual drivers. This should work without any problems, but you'll have to see for yourself. For me it worked, and to me thats what counts.
EDIT: some people have mentioned that 10.1 works fine after the OpenAL update. However, some still have problems after the OpenAL update and fixed their problems using 9.9. Try updating your drivers to 10.1 first, and if that doesn't work, downgrade to 9.9!
Well, before reading this thread, I was having problems with the game randomly locking every 5-15 minutes or so. I updated my ATI drivers to the latest version, which made the game now lock up after about 5 seconds of gameplay. Then I tried the v 9.9 drivers, with the same issue. Finally, after much searching and some subtle clues I found scattered around, I tried one last thing....
Turn off VPU Recover in the Catalyst Control Center. I think the issue is something to do with a problem between the display drivers and the graphics processor. VPU Recover is supposed to automatically fix these problems in real time, but for some reason it is causing Minecraft to lock up instead. Without VPU Recover the game seems to work okay, though maybe with a little intermittent jerkiness that may or may not be related. This still begs the question why VPU Recover is being triggered in the first place--it suggests some subtle but serious problem with the rendering engine. Notch, if you're watching, you may want to look into this.
This seems to be working... I will keep you posted if any problems remain. I'm still ussing the 9.9 drivers (not going to fix what isn't broken), but my hunch is that, assuming VPU Recover is the real problem (for me anyway), this fix would work in other versions too.