I can repro consistently this on karmic (updated to may 17th) using a machine 
that has:
01:00.0 VGA compatible controller [0300]: ATI Technologies Inc RV350 AP [Radeon 
9600] [1002:4150]

I believe it might be one of those bugs that goes away with DRI2? Not
sure though...

** Attachment added: "this is what the bug looks like"
   http://launchpadlibrarian.net/26859141/Screenshot-1.png

** Bug watch added: freedesktop.org Bugzilla #21780
   https://bugs.freedesktop.org/show_bug.cgi?id=21780

-- 
compiz dropshadows around menu over video surfaces show up as solid black 
instead of gradiently more translucent
https://bugs.launchpad.net/bugs/376625
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