I have now found a workaround for the issue.
I think it basically is to do with the upgrade from XAA to EXA
acceleration.
EXA appears not be working with the Intel GMA 965 (GM) chipset
(including the Intel X3100).
Upon editing my xorg.conf file to add references to XAA I now have
better performance, and am able to use KDE4 desktop effects.
In particular, under Section Device, I added:
Option "XaaNoPixmapCache"
Option "XAANoOffscreenPixmaps" "1"
Option "DRI" "true"
Option "AccelMethod" "XAA"
and also
VideoRam 440320
Option "XvMCSurfaces" "6"
Option "May_Need_ForceBIOS" "1"
but not sure if these last three items are necessary.
** Attachment added: "Working xorg.conf for GMA965 chipsets under hardy 4.1 or
intrepid k/ubuntu."
http://launchpadlibrarian.net/16355670/xorg.conf.amended.txt
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Poor graphics performance on Intel G965 system, ubuntu 8.10 alpha 3
https://bugs.launchpad.net/bugs/252094
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