I have the same problem with Hardy release. Mouse cursor moves jerky, desktop 
applications work slowly, but if I run any fullscreen application (like OpenTTD 
or Tuxracer) everything works fine in this particular application. The compiz 
'water' plugin (the one with the rain drops effect) also seems to affect this 
bug.
I tried enabling/disabling compiz, switched between drivers 'nvidia', 'nv' and 
'vesa', tried several mouses, disabled network interface - none of these helped.
So far I can blame either xserver or linux kernel for this bug.

** Changed in: xorg-server (Ubuntu)
       Status: New => Confirmed

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After xorg and gtk updates many programs run extremely slow
https://bugs.launchpad.net/bugs/210646
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Desktop Bugs, which is a bug assignee.

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