I prehaps gave you wrong/imprecise info about my
hardware. I just opened the case and had a look
at the cpu card which reads clearly 1.1.
See shots here:

Front

Back

I didn't take off the mainboard so I cannot tell you
for sure the PegasosII version, but typing

cd /openprom
.properties

in OF tells me

PegasosII,1.2 (so I assume it's 1.2)
Relative-addresses
Built-On 0x131CC6A (20040810)

Firmware is 1.2 (20040810112413)

But now I remember that when I bought my PegII
(no card update, I bought it already with G4 1Ghz)
OF 1.1 was installed. I later made the flash update
to the 1.2 you see above but I don't remember where I
downloaded it and/or who gave it to me.
I don't experience any problems. Nor I could test
by myself which gfx cards combo work and which not.
I use a Radeon 7000 sapphire AGP DDR 64MB.

I hope you find my info useful.