If you use VNC to connect to a PC running X server 1.7 (eg I'm running 2:1.7.6-2ubuntu7), compiz and nvidia restricted drivers (including the latest 195.36.24 drivers), the VNC screen stays static (there is no refresh), although the host PC screen refreshes correctly. Running VNC with the -noxdamage argument is a workaround (but this is very slow).
A fuller description is at https://bugs.launchpad.net/bugs/353126:
When using the nvidia-restricted or some ATI drivers and compiz desktop effects the vnc server will not refresh the screen. This is being caused by the xserver not getting "damaged" by the nvidia-restricted drivers. Linked bugs confirm this is not an issue on intel chipsets or nv driver.
Steps to reproduce:
Enable desktop-effects (default) with nvidia-restricted, virtualBox's display or some ATI driver like RV610
Enable remote desktop
Connect with VNC
You see a screen snapshot of your desktop but if you click a menu item there are no updates to the screen.
If you close and restart the vnc session, you get an updated snapshot but still no refreshes.
Use the -noxdamage argument with vncviewer. This is really inefficient and bandwidth hungry since the whole screen refreshes.
Kill compiz and use a different wm (metacity).