Same problem for me after upgrading from 10.04 to 10.10. It used to work
fine in 10.04. I use the 32 bit version. Disabling Compiz also fixes the
problem for me. Here's my GPU info:

$ lspci -v | grep VGA
00:02.0 VGA compatible controller: Intel Corporation Mobile 945GM/GMS, 
943/940GML Express Integrated Graphics Controller (rev 03) (prog-if 00 [VGA 
controller])

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Can't play flash videos full screen on firefox and google chrome with intel 
driver and compiz
https://bugs.launchpad.net/bugs/664265
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