OK, you'll have to do this:
1.) Open the terminal. ( ALT + F2 ) then type in "ccsm".
2.) CompizConfig Settings Manager should pop-out.
3.) Go to "General Options" and then to "Desktop Size".
4.) Change "Horizontal Virtual Size" to 4.

If you've typed in terminal "ccsm" and get error, do this.
Go to "System" --> "Administration" and open the Synaptic Package Monitor.
Then remove all packages associated with compiz. Mark them for complete removal.
Reinstall and here you go. Everything works fine ;)

This worked for me.

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number of workspaces not available in official release of gutsy
https://bugs.launchpad.net/bugs/154249
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