This is an accurate description of what I see:
  "Desktop notifications and the system monitor applet window are blank or just 
contain an apparently random grid of lines."

My computer is the same as yours:
  "This is on a Thinkpad X31 laptop with ATI Technologies Inc Radeon Mobility 
M6 LY graphics, Desktop effects are off."

-- 
Notifications are blank boxes
https://bugs.launchpad.net/bugs/440904
You received this bug notification because you are a member of Ubuntu-X,
which is subscribed to xorg in ubuntu.

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