Same problem here. Just installed 8.10 on machine with Geforce 7600GT.
Enabled the recommended version 177 driver and Extra desktop effects
(the 3rd option).

** Attachment added: "Screenshot of bug in action"
   http://launchpadlibrarian.net/19464876/title%20bar%20bug%202%20cut.png

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Desktop effects causes titlebar anomaly
https://bugs.launchpad.net/bugs/173767
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