Actually this is not specific to nvidia-restricted drivers. I have the
latest stable nvidia drivers from PPA. No remote display refreshing if
compiz is enabled. If i switch to metacity (same as no desktop effects)
then everything back to normal. Ubuntu 9.10 Desktop x64.

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Compiz / vnc screen refresh with nvidia-restricted driver/VirtualBox/ATI fglrx 
driver using X.org prior to release 7.5
https://bugs.launchpad.net/bugs/353126
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