Yeah - although everything I've read (since originally posting) on this
particular problem in relation to ATI cards suggests that the
Xinerama+Compiz functionality has never been available for ATI cards and
that the only solution for these cards is to use the alternative multi-
display mode. This was a bit of a surprise since I don't regularly use
ATI cads.

It does seem like a separate & new bug from what you've mentioned. Have
you had a look at your package update history to see if anything stands
out?

-- 
compiz broken with latest updates and nvidia display config
https://bugs.launchpad.net/bugs/558875
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