I confirm the bug as it's happening for me too. Strangely, i see this on some 
computers, but not all, all running Jaunty.
Re-assiging to xorg.

** Changed in: xorg (Ubuntu)
Sourcepackagename: None => xorg
   Importance: Undecided => Low
       Status: Incomplete => Confirmed

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[Jaunty] $HOME/.Xdefaults no longer being read
https://bugs.launchpad.net/bugs/320886
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