Thanks for reporting this bug. I can not reproduce this issue using
Xubuntu 8.04.2 installed after Ubuntu was installed. Do you have compiz
active? Also, could you try this using a Jaunty 9.04 development livecd.
That will not be on top of Ubuntu, but may help us to fix this. Thanks
in advance.

** Changed in: xfce4 (Ubuntu)
       Status: New => Incomplete

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Transparency problems with xfdesktop
https://bugs.launchpad.net/bugs/325662
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