As of Ubuntu 12.04, it seems to be fixed.
Audacious 2.3.1: Plugins -> General -> Audacious OSD.
audacious-plugins 3.2.1-4
/usr/lib/i386-linux-gnu/audacious/General/aosd.so
** Changed in: audacious-plugins (Ubuntu)
Status: Confirmed => Fix Released
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https://bugs.launchpad.net/bugs/719586
Title:
audacious' libnotify-aosd plugin doesn't work
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