latest Ubuntu update for compiz says it is un-blacklisting the i965
from compiz because there is a better workaround in the intel driver.
If you have already done the upgrade as described in
http://ubuntuforums.org/showthread.php?t=1130582 then you will need to
revert your changes to pick up the fixed intel driver.
I have installed it and it seems to fix the hanging problems that I
was seeing prior to upgrading as in the link above. Unfortunately, my
touchpad is just as insensitive as before. It drives me nuts.