I can also confirm above posts.
I've installed catalyst 10.7 drivers and 'downgraded' xserver-xorg-core and 
xserver-common to the original ubuntu versions and the problem seems to be 
solved!

Looks like this bug has been resolved... Yes!

(Still having some issues with video-tearing though, but thats another
thing (from what i've read, is that a shortcoming of the ATI catalyst
drivers and have nothing to do with ubuntu) .)

-- 
[Lucid][Ubuntu 10.04][ATI cards] Slow/freeze windows management (resize, 
maximise, .etc) with fglrx driver + compositing desktop.
https://bugs.launchpad.net/bugs/568988
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which is subscribed to fglrx-installer in ubuntu.

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