Public bug reported:

Binary package hint: gnome-terminal
Version 2.18.0-0ubuntu1 (feisty)
Before today's updates setting transparency on the effects tab would make the 
background translucent, now the background is plain (black in my case) 
regardless of where the slider is placed.

** Affects: gnome-terminal (Ubuntu)
     Importance: Undecided
         Status: Unconfirmed

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gnome-terminal composite transparency no longer works
https://launchpad.net/bugs/91985

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