The issue was resolved after i upgraded to Nautilus 3.6. See
instructions to install Nautilus 3.6 here: http://ubuntuguide.net
/install-nautilus-3-6-in-ubuntu-12-10
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I resolved the problem by disabling all compiz visual effects. See tip #9 on
this link:
http://www.upubuntu.com/2012/06/11-tips-to-speed-up-computers-running.html
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