I also upgraded from 8.04 to 8.10 and had all the above problems.  I
followed Jeremy Jackins' instructions, restarted X, enabled Compiz
features and now everything works as well as it did before the upgrade.

Just one note: while searching in the package manager for "radeon"
packages to remove, removing radeontool would also have removed acpi-
support, powermanagement-interface and ubuntu-desktop.  Cancelling that
one seemed like a good idea.  :o)

Thanks to Jeremy and all those who posted.

-- 
fglrx works, but window moving/resizing and scrolling are very, very slow; 
desktop effects don't work
https://bugs.launchpad.net/bugs/284687
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