I feel the problem is in the Notification Applet and Clock Applet. When I 
remove these applets from my panel the panel works normally.
I am running Ubuntu 10.04 upgraded from 8.04. Only on the upgrade machine I 
have problem. On my laptop I did a clean install and I don't get this problem.

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visual corruption affecting several panel applets
https://bugs.launchpad.net/bugs/439448
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