Short repro steps (using ubuntu hardy):
1. Add "System Monitor" as a gnome panel.
2. Install and run the game "supertux" (or basically any other fullscreen SDL game).
Detailed repro steps (for non-ubuntu users who want to see the bug):
1. Boot Hardy live CD.
2. Right click gnome panel in the top gray area, maybe 2 cm left of the blue help icon.
3. Select the "Add to Panel" menu item
4. Select "System Monitor" (it's quite far down the list with greenish icon).
5. Add universe as source in apt (use System::Administration::Software Sources and check the checkbox called "Universe").
6. Run "sudo apt-get install supertux" to install a SDL game.
7. Select Applications::Games::Supertux2
Gnome panel items should not engage in Z-order fighting with supertux while supertux is running in fullscreen.
Gnome insists on updating the panel CPU meter and also some other thing so basically two big black boxes appear along the top of the screen inside supertux. They just randomly flicker and it makes the game more or less unplayable.
Note 1: The same bug repros other games, for instance you can try installing the "Extreme Tux Racer" game from the etracer package in Ubuntu.
Note 2: This is not a driver bug. I'm using a Intel X3100 GMA card with a 965GM chipset and this bug was confirmed by a guy who has a ati radeon 9550 card.
Note 3: If I set System::Preferences::Appearence::Visual Effects to "None", then the bug goes away. This is the way you turn of compiz in ubuntu, so that's why I think this is a compiz bug.
Note 4: The original ubuntu bug report was filed here: https://bugs.launchpad.net/ubuntu/+source/meta-gnome2/+bug/237955
It's not Z fighting but bug 8732.
If enabling the compiz option 'Unredirect fullscreen windows' doesn't help, compiz might be able to handle this a little better though.
I'm using Ubuntu jaunty now and this bug no longer repros.