This is a bug in the nvidia driver. They offer a workaround in their
documentation and compiz uses it in gutsy but it doesn't work with every
card. Are you using gutsy or feisty?

** Changed in: linux-restricted-modules-2.6.22 (Ubuntu)
Sourcepackagename: compiz => linux-restricted-modules-2.6.22

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System slow downs with desktop effects enabled
https://bugs.launchpad.net/bugs/129340
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