Yep, confirmed.  This one hit me too.

Once I disabled /apps/metacity/general/compositing_manager I could, once
again, enable Compiz.

Running with the latest hardy-proposed (not hardy-backports) on a cheap
Lenovo ThinkPad T61 (6646-5WG) with Intel 965GM chipset.

-- 
Metacity and Compiz fight to be "compositing manager"
https://bugs.launchpad.net/bugs/231904
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