Forget my suggestion.  I took a leap and just removed ALL Compiz
components from the package manager and rebooted.  Works fine now.  So
it appears that it's not some crazy kernel update like I suspected, or
anything with Nvidia.  So the simple solution, the 'actual' workaround
until Compiz gets their crap together is just go into the Package
Manager, run a query for Compiz, and do a "Mark for complete removal" on
all 8 or so components of compiz.  Reboot, and VNC works fine.  A
relatively easy workaround for now.

-- 
Compiz / vnc screen refresh with nvidia-restricted driver/VirtualBox/ATI fglrx 
driver
https://bugs.launchpad.net/bugs/353126
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