ATI drivers are not crap and haven't been since at least 2003, when I started buying high end graphics cards, which at the time where all ATI. They do the job, but could do with some significant improvements.
Overall, I do prefer nvidia at the moment though. The driver control panel interface is much better and has more 3D options. I particularly dislike the ATI driver in the way it forces you to keep clicking at the top left all the time to select a different menu option. They had it right previously, with the standard hierarchy down the left side. Why f* it up?
Another thing I don't like, is that you can't turn off AA & AF. You can either set them to a minimum of 2x or application controlled and has always been this way. nvidia allows you to turn them off completely. This is so basic, I don't understand why they block this out by design in Catalyst.
These issues bug me so much, that I buy nvidia to avoid these problems alone, let alone the performance merits of either brand.
And now the following I am speaking from observations from about 18 months ago, so AMD may have improved in this time, hopefully:
I had a HD 4870 512MB from new, which I was happy with and worked quite nicely. Saw a few glitches in games like you do and is kind of inevitable with PCs, such as animation hitches and big frame rate drops sometimes, and general oddities.
Then a few months later I bought a used 8800 GTX for cheap to play with, because they're such legendary cards and I wanted to try one out. Now, if you compare benchmark reviews, the 4870 beats it by a fair margin.
However, on installing it and loading the latest driver at the time, I was really surprised how well my games played. The frame rates weren't much lower at all than my 4870 and in one or two cases somewhat higher. The animation was also smoother, with less hitches and things overall just worked a little better. And the much superior driver interface, of course. I was amazed and very surprised by all this.
My 4870 soon went on eBay and I got a Zotac GTX 285, which I have to this day and is serving me very well. It's fast and quiet and quietness is a very important quality in a card, for me: I'll reject it totally if it's got an annoying whine or is generally loud. The inconvenience and expense of an aftermarket cooler to fix this shouldn't be a requirement nowadays . This is why my next card upgrade is going to be the GTX 580, even if the new gen AMDs bench higher. The GTX 580 on TPU's review the other day impressed me a lot.
To be fair nvidia isn't without its faults. Why don't the custom display modes work properly, for example? They've been broken for years. There are a couple of other issues, but I can't remember what they are now.