Make sure the following is installed through synaptic package manager:
(gnome desktop)

compiz
compizconfig-settings-manager
compiz-core
compiz-dev
compiz-fusion-plugins-extra
compiz-fusion-plugins-main
compiz-gnome
compiz-plugins
libcompizconfig0
libcompizconfig0-dev
libcompizconfig-backend-gconf
libdecoration0
python-compizconfig

If you dont see these installed, then mark for installation (you may
need to reboot)

Running smooth on a T41p.

Thanks

-- 
[gutsy] Regression - "Desktop effects could not be enabled" on ATI Mobility 
Radeon
https://bugs.launchpad.net/bugs/144077
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