Hi,
I can also confirm this problem. I have a HP Omnibook 4150, upgraded from 
Xubuntu 7.10 to 8.04. The xfce-terminal worked with 7.10 but there seems to be 
a problem with 8.04. The terminal is blurry and unusable. I think my 4150 has a 
Neomagic MagicGraph NM2200 graphics chipset.
My teminal looks like this (found in another description of the problem, not 
from my screen but it looks excactly like this):
http://launchpadlibrarian.net/10924129/Capture-Xubuntu%20Hardy%20%5BEn%20fonction%5D%20-%20innotek%20VirtualBox.png

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xfce4-terminal window borders / decorations / widgets being incorrectly drawn 
(xubuntu 8.04)
https://bugs.launchpad.net/bugs/194769
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