I have _exactly_ the same bug !
With a fresh account (I created one for test purpose) this bug does not appear. 
I am trying to figure out where does this come, but found nothing yet.

I have an nvidia 8600, Jaunty up-to-date. I am using compiz as a window
decorator, choosing System > Prefs > Appearance > Visual Effects and
Extra launches compiz and everything run fine...

I attached my .xsession-errors also. I had this bug when I updated from
8.10 to current Jaunty, two-three days ago.

These commands : 
echo "conf: $XDG_CONFIG_DIRS"
echo "home: $XDG_CONFIG_HOME"

Does not provide any output (except a poor conf: and home: )

** Attachment added: "xsession-errors"
   http://launchpadlibrarian.net/24305955/xsession-errors

-- 
No window manager on login
https://bugs.launchpad.net/bugs/340140
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