The difference between your two xorg.conf's is that in the "working" one you're 
using the old obsolete -i810 driver, whereas Hardy uses the new -intel driver 
by default.
Please attach your /var/log/Xorg.0.log when booted with the "intel" driver, so 
we can see why it is not enabling compiz.

** Summary changed:

- Autoconfiguration of xorg.conf does not allow Compiz to function correctly
+ Some compiz functionality works on -i810 but not -intel

** Changed in: xorg (Ubuntu)
       Status: New => Incomplete

** Changed in: xserver-xorg-video-intel (Ubuntu)
Sourcepackagename: xorg => xserver-xorg-video-intel

-- 
Some compiz functionality works on -i810 but not -intel
https://bugs.launchpad.net/bugs/235444
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