Not a bug. As seen in release notes :

http://www.ubuntu.com/getubuntu/releasenotes/810#nVidia%20%22legacy%22%20video%20support

"nVidia "legacy" video support

The 71 and 96 series of proprietary nVidia drivers, as provided by the
nvidia-glx-legacy and nvidia-glx packages in Ubuntu 8.04 LTS, are not
compatible with the X.Org included in Ubuntu 8.10. Users with the nVidia
TNT, TNT2, TNT Ultra, GeForce, GeForce2, GeForce3, and GeForce4 chipsets
are affected and will be transitioned on upgrade to the free nv driver
instead. This driver does not support 3D acceleration.

Users of other nVidia chipsets that are supported by the 173 or 177
driver series will be transitioned to the nvidia-glx-173 or nvidia-
glx-177 package instead. However, unlike drivers 96 and 71, drivers 173
and 177 are only compatible with CPUs that support SSE (e.g. Intel
Pentium III, AMD Athlon XP or higher). Systems with older CPUs will also
be transitioned to the nv driver on upgrade. "

-- 
nVidia Version 96 not working & unable to use compiz after restart (Ubuntu 8.10)
https://bugs.launchpad.net/bugs/309920
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