I can confirm this too. This is very annoying.
The only workaround for me is to not use compiz. I tried the MToolkit fix which 
fixes the visual bugs but i start getting keyboard lockups on my java 
applications.

I'm running Gutsy with java 1.6.0_03.

uname:
Linux xxxxxxxxx 2.6.22-14-generic #1 SMP Sun Oct 14 23:05:12 GMT 2007 i686 
GNU/Linux

xorg.conf:
Section "Device"
        Identifier      "nVidia Corporation G70 [GeForce Go 7600]"
        Driver          "nvidia"
        Busid           "PCI:1:0:0"
        Option          "AddARGBVisuals"        "True"
        Option          "AddARGBGLXVisuals"     "True"
        Option          "NoLogo"        "True"
EndSection

** Also affects: sun-java6 (Ubuntu)
   Importance: Undecided
       Status: New

-- 
Compiz-Fusion Problems: Still not ready for production!
https://bugs.launchpad.net/bugs/139989
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