This is an accurate description of what I see:
  "Desktop notifications and the system monitor applet window are blank or just 
contain an apparently random grid of lines."

My computer is the same as yours:
  "This is on a Thinkpad X31 laptop with ATI Technologies Inc Radeon Mobility 
M6 LY graphics, Desktop effects are off."

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Notifications are blank boxes
https://bugs.launchpad.net/bugs/440904
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