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Getting xorg down in size won't be easy, but there might be some lightweight alternatives. If you need a lightweight window manager, you can't get any faster than Fluxbox.
You can try the "KDrive" X.org if you need lightweight X server, however you'll lose OpenGL for the privilege if I remember correctly, on some chipsets at least.
There are also a few other solutions for thinning down X.org - it will require you to edit the build system files to remove components, and maybe add a few in. Why not try Xcb instead of Xlib, for a start? Get rid of bitmap fonts.. and any esoteric formats there may be in the process. Disable DGA, and all those extensions you don't need (don't even build them!) because really all you need is XAA/EXA, DRI support and the Radeon driver, and a couple small support libraries to get a full X server with full acceleration..