If you try to run tightvnc or realvnc with xfwm4 from CVS and then start a VNC session that goes full screen, the F8 popup will never come up once in full screen mode. I suspect the popup is appearing, but is just not appearing "above" the VNC window. The unfortunate consequence is that there is no way to exit full screen mode, and I have to kill VNC from a vterm. Not sure if this is a bug or an "incompatability..." if devs try it out, they'll see quickly what I'm talking about. Thanks.
It works for me with VNC 4.x - I don't know about previous versions. What version of VNC client are you using?
Was running tightvnc 1.2.7 and Realvnc 3.3.7, both fail... however, I compiled RealVNC 4.0 and ran that, and it now uses a different kind of popup which doesn't experience the problems the old version(s) did. I'll leave it up to you, if you want to look into why the old versions didn't work, or since it works with a newer version, we can just mark it WONTFIX ;)
Fullscreen mode in older VNC client is said to be "incompatible" with ICCCM (from the man page itself). You can just start w/out fullscreen and toggle to fullscreen later on using xfwm4's Alt+F11 shortcut. That will work.