I tracked this down to the xgl server and my fglrx.  
I don't know if it occurs on non-fglrx systems or on all fglrx systems.
A temporary fix until Ubuntu corrects this problem (PLEASE!!) is to:

  (as root, however you get there ...)
  cd /etc/X11/Xsession.d
  mkdir SAVE
  mv ??xserver-xgl_start-server SAVE

then log out and log back in, which, I believe, restarts your xserver.  I 
ususally
ctl-alt-f1 and login as root on that that terminal 
(I've given root a password so I can log in as root), and
  /etc/init.d/gdm restart

The clue was noting gutsy had set DISPLAY to :1.0 which was the flag
that the xservers were layered (? not certain I'm saying this right).  And that
I needed to STOP the layering.

FWIW ... in another month or two rumors are that AMD/ATI will finally have
fglrx able to handle the eye candy w/o the layered xserver kludge.

-- 
Typing in text form in Firefox becomes very slow in Gutsy
https://bugs.launchpad.net/bugs/132053
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