Same bug applies for me with a new installed Ubuntu 10.10.
Nvidia Gtx 460 and core i7.
I can reproduce the behaviour mentioned by Reason (killing and restarting 
gnome-settings-daemon as root).
Changing to the the nouveau driver didn't fix the problem for me.
Haven't tried the crappy workaround so far.
I have reinstalled Ubuntu at least three times with different configurations 
without success.

Also I have a parallel Ubuntu installation upgraded from 10.04 to 10.10
which does not show the bug. But so far I could not figure out why.

So please increase the importance of this Bug and fix it soon :)
As logs or other information is required please tell me what you need.

-- 
Meerkat (10.10) does not apply theme properly
https://bugs.launchpad.net/bugs/649809
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which is subscribed to nvidia-graphics-drivers-180 in ubuntu.

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