I have been hearing about people having trouble with the intel GMA965 graphics card being blacklisted in gutsy gibbon 7.10 and not being able to get compiz to work.  This was very common in gutsy but now in the relese of hardy heron 8.04 the card has been removed from the blacklist.  I have this card in my toshiba laptop and it worked fine in gutsy as well as in hardy.  The key in gutsy was to install linux-backports-modules and xserver-xgl. This may also work in hardy heron as well but I have not needed to do this as mine is working fine with compiz right out of the box.

  For those of you who are still having trouble with compiz and the GMA965, go to a terminal and type

sudo apt-get install linux-backports-modules-hardy xserver-xgl

  You may be required to reboot your machine but after that you sould have compiz enabled.  You may want to just install the backport modules before xserver-xgl and see if that works but installing both should do the trick.