I found a different workaround. I  had this installed on my HTPC and can
only connect via SSH and VNC so I gave it this command

"sudo apt-get remove --purge compiz-core desktop-effects"

to remove compiz and desktop effects and then

"sudo /etc/init.d/gdm restart"

to restart the x server.

Fixed the problem...

-- 
Compiz / vnc screen refresh with nvidia-restricted driver/VirtualBox/ATI fglrx 
driver
https://bugs.launchpad.net/bugs/353126
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