this is a wide problem that i am experiencing... middle click on the wall paper adds workspaces, but they do not function, the workspace switcher pannel plugin does not add work spaces, im stuck in a 2x2 panel under compiz expo, under gnome i can get a 4x1 cube going, under xfce im stuck with a 1x1 cube. ubuntu 11.10 nvidia drivers amd processor finally xfce 4.6 did not have this problem under the same hardware build.... ubuntu 10.10 migrated to 11.04 to 11.10. workspace switcher panel plugin in 4.6 adds workspaces where 4.8 does not, and only shows 1 workspace, when extra workspaces are added under 4.8 they do not appear immediately
I think this is a compiz issue, because Xfce simply request another workspace, wm is responsible for adding it. Maybe try xfwm4 see if the problem still occurs.
Maybe compiz is in virtual mode, not in workspace mode.