Removing knotifyrc doesn't resolve the issue for me. Spoke to someone
(scottk) on irc of #kubuntu-devel and there is an intel related bug
which could be related to this. I run on Intel hardware.. see attachment
for lshw output


** Attachment added: "lshw of laptop"
   http://launchpadlibrarian.net/30268431/lshw.log

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[karmic] Unable to logout/reboot/shutdown from within KDE
https://bugs.launchpad.net/bugs/410466
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