"The remote desktop solution in Ubuntu uses the VNC backend which can't
read from hardware accelerated display"

That's hardly true, testing on a few xserver 7.5 machines (running fedora 12 
but that should not make any difference)
* intel + compiz + xdamage enabled = no problem
* open source radeonhd + compiz + xdamage enabled = no problem
* binary nvidia + compiz + xdamage enabled = screen does not refresh
* binary nvidia + compiz + xdamage disabled = no problem

Hence it really looks like only the binary drivers (at least nvidia,
haven't tested fglrx) are affected. And when using binary drivers,
disabling xdamage in gconf: /desktop/gnome/remote_access/disable_xdamage
should suffice (and this imo whould be something that could be done
automatically when a user installs a binary driver through the repos).

For people experiencing this issue with open source drivers on a clean
lucid install / live cd, they might want to give the fedora 12 / 13 live
cds a try, just in case it were indeed a problem affecting only ubuntu.

-- 
Compiz / vnc screen refresh with nvidia-restricted driver/VirtualBox/ATI fglrx 
driver using X.org prior to release 7.5
https://bugs.launchpad.net/bugs/353126
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