If you can get direct rendering on display :0, then it's definitely xgl which 
is now installed by default.
In this case this bug is a duplicate of bug #136598:
https://bugs.launchpad.net/ubuntu/+source/xserver-xgl/+bug/136598

Also look for this one for more info:
https://bugs.launchpad.net/ubuntu/+source/xserver-xgl/+bug/136962

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gutsy fglrx no direct rendering no desktop effects
https://bugs.launchpad.net/bugs/144005
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