There was an update today of gnome-panel after which I was able to do
things as expected.
gnome-panel (1:2.27.92-0ubuntu1) karmic; urgency=low
* New upstream version:
...
Wnck Applets
- Fix spin buttons not working in workspace switcher preferences
...
* debian/patches/16_compiz_workspace_switcher.patch:
- updated spin adjustments in the workspace switcher to work correctly
(lp: #423493)
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unable to set more than default 2 workspaces/viewports
https://bugs.launchpad.net/bugs/426989
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