I'm getting the same behaviour. I'm running Win7 Professional 64-bit as host 
and Ubuntu 12.04 as guest.
Seamless mode works fine for me with Ubuntu 11.10 (Unity) as guest but the host 
desktop is obscured by the guest Desktop background when using Ubuntu 12.04 
with Unity as the guest.

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https://bugs.launchpad.net/bugs/999929

Title:
  Seamless Mode Not Working Correctly in Virtual Box

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