I can also confirm I had this problem on a ASUS M3N-H/HDMI with a fresh
install of Ubuntu 9.10 and the most recent NVIDIA drivers.  However,
disabling desktop effects resolved this issue for me.

-- 
Compiz / vnc screen refresh with nvidia-restricted driver/VirtualBox/ATI fglrx 
driver using X.org prior to release 7.5
https://bugs.launchpad.net/bugs/353126
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