I'm having strange issues too.
Ubuntu 7.10 + 169.09 driver. Compositioning is enabled.
I'm running metacity as a window manager, and with some gtk apps (mostly firefox), the window title bar will change to psychedelic
colors and/or completely disappear.
The colors appear to be a negative of the actual colors (see "invert.png" attached below for reference), and usually the entire bar for that application (and only that application) will change.
This happens with identical driver version at home on Ubuntu 7.10 AMD64 with Emerald, and I don't remember it happening prior to upgrading 169.09.
For example, if Firefox is showing this psychedelic border, apps such as Pidgin or Terminal Server Client look fine.
Both stations that show this are running avant-window-navigator (not sure if its related), and my home station is very far from vanilla (kde + emerald + customized awn), however, the station at work is mostly stock ubuntu.
Regardless, it's not a major issue, just a bit bazaar! Thanks for amazing linux support, most else works great!!!