I've done more research, and it looks like I'll be needing to buy an active converter. The reason seems to be around TMDS, which is the signal coding used to translate data to a monitor.
TMDS is the code standard for DVI and HDMI signals. Display port uses an entirely different standard, and thus has it's own coding chip. The signal over DP is not compatible with either DVI or HDMI. The 5800 cards only contain 2 TMDS coding chips, and one DisplayPort chip.
Since there's only 2 TMDS chips, the 3rd signal has to be a DisplayPort Signal, since that the only signal left to send. If you want to use three monitors, you need to send signals through all through all 3 coding chips => 2x TMDS +DP
So if you only have 2 DVI/HDMI monitors hooked up, whatever ports are being used will utilize those TMDS circuits to send signals to your monitors. If you only use one DVI plug and route a DP signal through a cheap passive DVI/HDMI plug, the card will look to teh reciving monitor and handshake TMDS through the DisplayPort plug.
But to transmit to 3 monitors you need to transmit through both TMDS signals, and the 3rd DisplayPort signal. The TMDS chips don't care what port they send a signal through, however teh DisplayPort signal can only be sent over the DisplayPort plug.
If you have a 3rd monitor without a DP plug, the monitor will not be able to understand a DP signal. That's why you need an active converter that transcodes the DP signal into TMDS. Once the DP signal is actively converted into TMDS and sent through DVI or HDMI, the monitor will then understand it.
