Ok, I played around with it and found out that above error is caused by attempted installation of:
Or I guess mesa-libGL.i586 package.
It seems like it is trying to install both nvidia and ATI drivers or something like that.
I already am using ATI proprietary driver, as far as I know Mesa GL lib is not required in that case, no?
Please help me out. I guess I should have installed mesa before installing ATI?