With the great help of those on the Ubuntu forums XGL/Compiz is looking greater than ever. The Updated Compiz adds the opacity plugin and darkens the background for the expose effects. But better than that, the Updated XGL removes all the flicker that I was seeing.
Well, all the cool kids are doing it so I thought that I better have a go. XGL and compiz run on my integrated i915 video without problems and I am amazed at the speed and quality for pre-alpha software.
After all of the hassle of building Compiz and friends (excluding XGL) from CVS I found this and this (includes new opacity plugin).