What changes occur in linux graphics stack when a GPU driver is installed?

This image from Wikipedia illustrates the so-called "linux graphics stack". Suppose I buy a laptop that is so new that there exists no dedicated device driver for its GPU. Hence, the graphic quality is bad until one day some decent developer creates an excellent free driver and by updating my linux distro I notice that the graphic quality has become superb and flawless. My question is: how has the update changed the graphics stack? In particular, I'd like to know if the new graphics driver is merely run in user-space or at least some part of it is run in kernel-space. By the way, I'm not a very advanced linux user. Please keep that in mind. :)