I got visual effects working in Ubuntu 10.04 running under VirtualBox 3.2.8 with a host OS of Windows XP SP3. I had to enable 3D acceleration in VirtualBox, and then I had to install the compizconfig-settings-manager package.
OK, so it works, but now the VirtualBox window doesn't get repainted when I move other Windows XP windows in front of it. If I disable the Visual Effects, then the repainting starts working again.
Anyone know if this is just a bug in VirtualBox's 3D acceleration? (I think it's fairly new.) Or is there some tweaking I can do in the Compiz configuration?