As a start, I tried removing xorg.conf file completely and restart X. The sky didn't fall down! In fact, I didn't notice any change. Everything from USB hotplug to OpenGL continued to work as before.
The only tweak needed was to the old font system. Unlike fontconfig, the old X font system seems to depend on the "font path" set in xorg.conf. This was a problem for using my custom SUN22x12 font in xterm. After adding the following lines to ~/.fvwm/preferences/Startup, this problem was gone, too.
AddToFunc InitFunction + I Exec exec /usr/bin/xset +fp /usr/local/share/fonts