You've already made up your mind that there's something wrong with Linux and nothing posted here is going to change that.
If you were really interested you'd poke around and find the answers yourself.
Or you'd go download a Live CD and test whether your hardware works or not. But you're not going to do that.
Most likely because you wouldn't have anything left to complain about, and we can't have that, now can we?
ATI support is handled by ATI. The R420 chipset is well supported, both with the internal Xorg driver and the ATI driver. Where they fall down, generally the TV-Out parts, the GATOS Project has TV-Out support for most ATI cards, including the AIW.
And you could have known this after a 5 minute search, or after booting up a Live CD.
As far as running Windows apps on Linux, it's possible. Silly, but possible. Other posters have directed you at the various flavors of Wine, Crossover Office and such.
i'll look into it again sometime, maybe its better now
It's hit and miss for Photoshop under Wine, and IIRC CS2 doesn't even run right under any distro yet.
GIMP is great for the home user, who doesn't need the 800lb gorilla of image editors. But don't even try to tell a Photoshop pro user that GIMP is a substitute, as it has far too many deficiencies. Some are its own fault (color management, expanded color models), some the fault of the proprietary nature of some of the printing industry, especially spot colors like Pantone and HKS.
You don't have to think
"there's something wrong with Linux"
to prefer Windows.
They are different things.
One is a fringe OS with
lots of cool features,
and the other is
the whole wide world. Just because
a person enjoys
living in New York
or Los Angeles they're not
saying Des Moines sucks . . .