I have this issue with both remote desktop server and client running
Ubuntu 10.4, server uses ATI/AMD FGLRX graphics driver; either disabling
desktop-effects or setting noxdamage to true in gconf-editor are
verified workarounds, but it would be great to have a fix.

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