I am experiencing the white boxes as well on a fully updated Gutsy. But
I have a ATI graphics card.

My device section from xorg.conf (if that helps):

        Identifier      "ATI Technologies Inc Radeon RV100 QY [Radeon
7000/VE]"

        Boardname       "ati"

        Busid           "PCI:1:0:0"

        Driver          "ati"

        Screen  0

        Option          "MergedFB"      "off"

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White boxes instead of shadows on Intel 945 (-intel driver)
https://bugs.launchpad.net/bugs/116808
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