Whilst reading [H] I came across an interesting story from Tech-Report which states that ATI is not doing SM3 properly.

No, vertex texture fetch is not supported. However, since the X1000 family does all pixel shader calculations with FP32 precision, just like the vertex shader, it is possible to get the same results using the render to vertex buffer capability. Basically, you do a quick pre-pass where you render to a special linear buffer in which each pixel represents a vertex. Textures can be used to modify each vertex through the pixel shader, and the result is then read back into the vertex shader. The result is fast vertex texturing with full filtering support, without requiring any special hardware in the vertex shader engine.