When you enable the Compositor feature of XFCE, Terminal become very slow and even moving Terminal window is difficult (Very slow to move, etc..) with the --enable-gXL option active or not in VTE.
I can vouch; Terminal is pathetically sluggish when compositor is enabled under Fedora 6, but I never had a problem with it in Kubuntu 6.10 as I recall.
*** This bug has been marked as a duplicate of bug 2818 ***