Running Ubuntu Hardy (with kernel 2.6.24-11-generic), using xserver-xorg-video-intel version 2:2.2.1-1ubuntu4 , xvideo output is not available when enabling compiz.

Video controller:
lspci
00:02.0 VGA compatible controller: Intel Corporation Mobile GM965/GL960 Integrated Graphics Controller (rev 0c)
lspci -nvvvv
00:02.0 0300: 8086:2a02 (rev 0c) (prog-if 00 [VGA controller])
        Subsystem: 17aa:20b5
        Control: I/O+ Mem+ BusMaster+ SpecCycle- MemWINV- VGASnoop- ParErr- Stepping- SERR- FastB2B-
        Status: Cap+ 66MHz- UDF- FastB2B+ ParErr- DEVSEL=fast >TAbort- <TAbort- <MAbort- >SERR- <PERR-
        Latency: 0
        Interrupt: pin A routed to IRQ 20
        Region 0: Memory at f8100000 (64-bit, non-prefetchable) [size=1M]
        Region 2: Memory at e0000000 (64-bit, prefetchable) [size=256M]
        Region 4: I/O ports at 1800 [size=8]
        Capabilities: [90] Message Signalled Interrupts: Mask- 64bit- Queue=0/0 Enable-
                Address: 00000000 Data: 0000
        Capabilities: [d0] Power Management version 3
                Flags: PMEClk- DSI+ D1- D2- AuxCurrent=0mA PME(D0-,D1-,D2-,D3hot-,D3cold-)
                Status: D0 PME-Enable- DSel=0 DScale=0 PME-
                Bridge: PM- B3+

With the latest update for the driver hardware overlay was introduced and texture video disabled, but brought no change on this.

Using XAA, the video does not show up, instead an error message appears on the console:

X11 error: BadAlloc (insufficient resources for operation)

Using the default EXA acceleration, the video playback starts, but is balls-achingly slow.

Using a low resolution video you may not notice this bug at first on a laptop panel, it will be just laggy and cause a high CPU load.
I'm using an external monitor (with 1680x1050 resolution). Putting even a low resolution video to full-screen results in a playback with approx. 0.5 FPS.

I tried (as suggested here: http://ubuntuforums.org/showthread.php?t=707473) to use xserver-xgl, but brought no change on the issue.

Section "InputDevice"
 Identifier "Generic Keyboard"
 Driver "kbd"
 Option "XkbRules" "xorg"
 Option "XkbModel" "pc105"
 Option "XkbLayout" "hu"
 Option "XkbVariant" "102_qwertz_dot_nodead"
 Option "XkbOptions" "lv3:ralt_switch"
EndSection

Section "InputDevice"
 Identifier "Configured Mouse"
 Driver "mouse"
EndSection

Section "Device"
 Identifier "Configured Video Device"
EndSection

Section "Monitor"
 Identifier "Configured Monitor"
EndSection

Section "Screen"
 Identifier "Default Screen"
 Monitor "Configured Monitor"
 DefaultDepth 24
 SubSection "Display"
  Depth 24
  Virtual 2048 2048
 EndSubSection
EndSection

Section "InputDevice"
 Identifier "Synaptics Touchpad"
 Driver "synaptics"
 Option "SHMConfig" "on"
 Option "HorizEdgeScroll" "0"
EndSection

Section "ServerLayout"
 Identifier "Default Layout"
 Screen "Default Screen"
 InputDevice "Generic Keyboard"
 InputDevice "Synaptics Touchpad"
EndSection

Section "ServerFlags"
    Option "AllowNonLocalModInDev"
    Option "AllowMouseOpenFail" "true"
    Option "AllowDeactivateGrabs" "true"
    Option "AllowCloseDownGrabs" "true"
EndSection

Everything else works fine, only Xv is unusable (both with XAA and EXA), but only if compiz is enabled. Also reported here: https://bugs.launchpad.net/ubuntu/+source/xserver-xorg-video-intel/+bug/201596 .