I'm using the Ati driver from 
System - Administration - Hardware Drivers
Compiz is now working (on the middle setting)
I also went into a terminal console 
Applications - Accessories - Terminal
and typed
gstreamer-properties
the predictive text function on the Tab key helps ;)
In the pop-up box, on the "Video" tab i changed the Output to the one that says 
"... (no Xv)" and suddenly everything got a lot smoother in multimedia (movies)

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When I use the (Compiz Fusion) effects in Ubuntu 8.10 I get Firefox only 
fullscreen
https://bugs.launchpad.net/bugs/299415
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