Ok, installed the new Lenovo 8.56 switchable graphics driver. Also tried the ATI 8.60 driver (Catalyst 9.4 that now ships w switchable graphics from ATI.) Here are my experiences:
Lenovo 8.56 driver
1. If you have been using the modded ATI driver, don't forget to uninstall it from the ATI Catalyst Install Manager under Programs in the Control Panel while still in discrete graphics mode before rebooting and turning on switchable graphics in bios.
2. Only glitch in install process was that one needs to delete (or change name for) the C:\DRIVERS\WIN\VIDEO folder before running the extract of the new driver. Otherwise even if you answer Yes All to the replace files question the setup program will still try to install the old 8.52 driver. If you run the express version of the install you may not even notice this so doublecheck in catalyst center -- advanced -- info center -- graphics software or in device manager that 8.56 is installed. (If you installed the old driver from System Update you may not have the VIDEO folder.)
3. The new driver works with my OpenGL graphics application that the old 8.52 didnt work with at all. I won't be able to test in my advanced minidock w a dvi monitor for the next couple of weeks but the driver seems to work ok w an external vga monitor.
4. There are irritating droppings of resolution -- specifically after having used the external monitor (1440x900) it always drops the resolution for a few seconds when going into integrated mode messing up the desktop.
5a. The automatic update of the Vista WEI index part of the install process fails. If I remember right it did also with the old 8.52 driver install. But the normal update of the WEI index from Control Panel -- System -- Performance works.
5b. As the 8.52 driver didn't work at all for me I don't have much experience with it but with the modded ATI 8.57 driver I have been using, the WEI index was at 5.3 on my T9600 T500. With the new Lenovo 8.56 driver this has improved to 5.4 
ATI 8.60 driver and 9.4 Catalyst Center
As described here ATI/AMD started shipping switchable graphics for desktops. This means the drivers available on the ATI site now include switchable graphics support. So I downloaded and modded the latest Catalyst 9.4:
1. The Mobility Modder has to be the latest beta release, the standard Modder 1.1.1.0 stopped working with Catalyst 9.2. The beta is the second download here . As usual download the ATI file, start the setup and interrupt it after it has extracted its files. Point the modder to the 9.4 folder in C:\ATI\SUPPORT. After modification restart from the Setup file in that folder.
2. There was no way I could get 8.60 to install in switchable graphics mode as the driver for the ATI 3650. This isn't so strange -- according to the ATI link above they support 3470 (T400) but not 3650 (T500). It would be interesting to hear experiences with this driver on a T400. The ATI driver as opposed to the Lenovo driver doesn't come with a compatible driver for the Intel integrated graphics. But I am not so sure the advice in another thread is correct to install the Lenovo standalone Intel drivers, Catalyst kept complaining that those Intel drivers did not support switchable graphics, so it might be smarter to continue to use the Lenovo switchable graphics drivers for the Intel graphics.
3. So I installed the 8.60 driver in discrete graphics mode instead. While later on using my OpenGL graphics application I discovered I had terrible performance so I had to stop, roll back to my old 8.57 driver and when logging in again had the usual excellent performance. I forgot to run the WEI index for the 8.60 driver.
4. While twiddling with the ATI driver in switchable graphics mode I discovered I could get the 9.4 Catalyst Center to work with the Lenovo switchable graphics drivers. This has the advantage that you can switch from rightclicking the desktop and also that there is an option to automatically switch when on battery. And your are independent of the Thinkvantage Power Manager.
5. To install the 9.4 Catalyst Center on top of the Lenovo 8.56 driver download and mod the ATI driver as described in 1. above. Then in Setup start by choosing uninstall and do a selective uninstall of the Catalyst Center ONLY leaving the Lenovo 8.56 drivers in place. Then run the same Setup file again doing a selective install of the 9.4 Catalyst Center ONLY.
6. After testing this for some time I have come to the conclusion Lenovo made the right design decision not to switch automatically going to and from battery. And as the dropping of resolution described in Lenovo point 4 above seemed to get slightly worse (I could be wrong about this) I decided to uninstall the 9.4 Catalyst Center again and just run with the Lenovo 8.56 version.
