I have this issue in jaunty.
x11vnc option "-noxfixes" helps but then cursors are ugly.

I have found this upstream bug
http://bugs.freedesktop.org/show_bug.cgi?id=18451

** Bug watch added: freedesktop.org Bugzilla #18451
   https://bugs.freedesktop.org/show_bug.cgi?id=18451

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gdm with x11vnc not honoring KillInitClients
https://bugs.launchpad.net/bugs/217892
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