So I just solved this issue by installing "ATI binary X.Org driver" from
Ubuntu Software Centre (for some reason drivers weren't showing up in
the normal System > Administration > Hardware Drivers.

However I no longer have any desktop effects but I don't really care.

Note that even before I installed this driver, disabling desktop effects
did not fix the problem.

I guess this means that the problem is something to do with the default
radeon driver (I have a radeon x800) and/or some special way in which
thunderbird displays.

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Xorg eats processor cycles while waiting for slow Internet
https://bugs.launchpad.net/bugs/297143
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