Not sure what I can add to this discussion other than either more confirmation or confusion, but I just upgraded my (2007) Mac Pro 2,1 8x3.0ghz to a Radeon 5770 after the original Radeon X1900 XT started losing one monitor on a regular basis.
I am running the latest update of Lion. I have 2x ACD 23", last aluminum models.
I am running one ACD from the DVI port, and the second from one of the MDP using a passive MDP to DVI adapter. Based on all the forums that I had read, this was what I was expecting and even though not officially supported, has been working flawlessly for me.
Re the version of OS X required, I believe it is tied to when Apple delivered the necessary drivers to support these cards.