I'd just like to note that I too am having this problem on multiple
machines.  Here are the steps that I took to arrive at this error:

-Installed Feisty 7.04
-Installed ATI Proprietary drivers
-Installed XGL per this guide: 
https://help.ubuntu.com/community/CompositeManager/Xgl  (Method A)
-Logged into User1
-Logged out of User1
-Logged in to User2

I didn't have Log Out or Shutdown listed when I went to shutdown the machine so 
I changed my /usr/bin/startxgl.sh to this:
#!/bin/sh
Xgl :1 -fullscreen -ac -accel xv:pbuffer -accel glx:pbuffer &
DISPLAY=:1
dbus-launch --exit-with-session gnome-session

Also his work around, also fixed my problem.  Simply having root own it
and changing the file permissions to 777 should fix this.

-- 
Switching between users running Xgl requires a system restart
https://bugs.launchpad.net/bugs/115452
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