I'm not sure if this is related to this bug, but I got the same problem
(ATI Radeon x1650 + compiz = VERY slow) so far.

Compiz is working very fine again after today's update (linux
2.6.32-23.37).

-- 
[KMS][RV530] compiz very slow on Radeon AGP video cards
https://bugs.launchpad.net/bugs/496653
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