Yes, it's still an issue and I'm experiencing it in 8.04 (8.10 doesn't
solve it either).  Look the quantity of posts in the related thread in
the nvidia forums:

http://www.nvnews.net/vbulletin/showthread.php?t=123912

Although the post is about 180.* series of drivers, I'm experiencing the
exact same issues with the Ubuntu provided 169.xx driver for 8.04.  I
posted my opinion in that same thread, though I'm not sure it's a
problem of the nvidia driver or xorg.  It's also very noticeable in
opengl apps such as Blender, where you see truly lame flickering polygon
edges in the 3D models whenever you rotate about them.

Xv/direct rendering also triggers the problem for some videos (not all).

I had no problems with a previous proprietary driver and previous nvidia
card.

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gnome freezes after proprietary nvidia driver install
https://bugs.launchpad.net/bugs/146954
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