AMD will release next month a new version of its ATI Catalyst driver suite that unlocks stream-processing technology that currently lies dormant in ATI Radeon HD 4000 series videocards.

AMD describes ATI Stream as a collection of hardware and software technologies that enable AMD GPUs to work with a system’s host CPU to accelerate applications beyond graphics. Games and other applications will need to be coded in a particular fashion to take advantage of ATI Stream, but AMD says that imaging and video-editing software developers ArcSoft and CyberLink are very close to releasing updates to their existing programs that will tap this capability.

ArcSoft’s TotalMedia Theatre, for instance, will use ATI Stream to enable a new feature known as SimHD, a video post-processing technology that render standard-definition video closer to HD. CyberLink plans to release an updated version of its PowerDirector 7 video-editing software in the first quarter of 2009 that will tap ATI Stream to accelerate video conversions.

In the meantime, AMD will release a new version of its own free Avivo Video Converter that will use ATI Stream to accelerate video conversions. AMD claims a Radeon HD 4870 with a 512MB frame buffer, in combination with a quad-core Intel Core 2 Duo QX9650 processor running at 3.0GHz and 6GB of system memory, was able to convert one hour of MPEG video (1920x1080 resolution at 24fps) to a format compatible with a portable video player (MPEG4, 320x240 resolution, 24fps) in 12 minutes. The same conversion using iTunes 8.0.1 and the WinQuickTimeMPEG2 pack required three hours and 23 minutes on the same rig, according to AMD.

It’s interesting that AMD chose not only an Intel CPU, but Intel’s most powerful CPU for this comparison. Most consumer rigs have far less horsepower under the hood, so we look forward to testing this, and making a comparison to what Nvidia has to offer, on more mainstream hardware.