Ok, so the issue is fixed by removing fglrx which didn't work where as
the free driver did. Closing as fixed.
** Changed in: xorg (Ubuntu)
Status: New => Fix Released
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ATI Technologies Inc M22 [Mobility Radeon X300] don't work Rendering XGL and
Compiz Fusion don't works
https://bugs.launchpad.net/bugs/203809
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