Further to this, I've found that I can still use compiz if I make a
change to the configuration of my vnc server (I'm using the built-in
Ubuntu vnc server, called vino-server, that you get to via System/
Preference/Remote Server).
Run gconf-editor, then navigate to desktop/gnome/remote_access. Place
a check-mark in the disable_xdamage button. The description states
that this may slow vino down slightly, but I find performance on my
iPod is still good over the LAN.