I've had some of these - small coloured horizontal but not vertical lines at upper marigin of desktop sometimes on Kubuntu 9.04 or 9.10 but I haven't saw any on Lucid, yet.
No problems with visual effects (in KDE on Kubuntu), too - since I've upgraded from 9.10 (to 10.04 beta) I think it's always working and I can enable/disable them when I want to without problems.
I haven't noticed any sluggish graphic response, too - whole desktop (with effects) works a lot better than on recent NVidia card (with it's binary drivers) at work. And I have two KDE fully loaded at the same time everytime (multiseat configuration with two simmilar Radeon R3xx cards). The system is a bit less responsive only at logging in into KDE - it's because of two instances of KDE loading at the same time and preload service for most used applications.
Take a look at system processes and CPU/RAM usage - maybe there's in background something that eats yours PC resources.