According to the discussion on the upstream bug report, it sounds like
this is a configuration issue that textured video should be used by the
video player, and not an X issue?  If I'm wrong, and the issue can still
be reproduced on Karmic, feel free to reopen the bug and explain in more
detail what needs done.

** Changed in: xserver-xorg-video-ati (Ubuntu)
       Status: Confirmed => Invalid

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compiz dropshadows around menu over video surfaces show up as solid black 
instead of gradiently more translucent
https://bugs.launchpad.net/bugs/376625
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