For some reason when I upgraded to Ubuntu 9.04 about 6 months ago the desktop effects stopped working. They had worked fine on the highest setting but now I get a message saying "Desktop Effects could not be enabled," whenever I try to enable them. Help! I have a Dell Inspirion 1525.
Is that a GM965 chipset (X3100 graphics)? If so, compiz blacklisted it due to some people experiencing crashes (see bug 359392). If you're confident it should work on your hardware you can try re-enabling it (see bug 363821), or supposedly if you update Jaunty it should have fixes.
(Or of course there's always Karmic, which uses UXA rather than EXA, which means you wouldn't get that bug... although you might of course get sparkling new bugs.)
Maybe, your Xorg has lost video driver? Try launching the "hardware drivers" application and re-set it. Without a driver no desktop effects are working.