I was having this problem too.  I installed 8.04RCamd64 fresh and
migrated my /home/user directory from my old install.

Behaviour notes:

Keypad worked in Virtual Terminals
Keypad worked in GDM
Keypad worked in GNOME under newly created user account w/default settings 
(/etc/skel/ ???)

Keypad did NOT work in GNOME on my own user account.
Keypad would not emulate mouse nor would it emulate arrow keys.

SOLUTION:

1. Main Menu > System > Preferences > Assistive Technologies
2. Check "Enable assistive technologies" box
3. Click the "Keyboard Accessibility" button
4. Select the "Mouse Keys" tab
5. Un-check the "Allow to control the pointer using the keyboard" check box
6. Enjoy keypad workiness

These are the steps that worked for me.  Changing keyboard layouts,
layout options, or simply un-checking the "Allow to control..." option
in Keyboard preferences had no effect.  It was not until I also made
sure to check the "Enable assistive technologies" under Assistive
Technologies that it "fixed" the problem.

NOTE:  I am happy to have it working, but I am not happy with this
"solution".  The symptoms disappear, but the problem is not truly
identified.  Only the pertinent variables.  In other words we have a
"what to do" but not a "why to do it" type answer.

Hope this works for others!!!!

Tim LePes

-- 
Numeric keypad no longer works in Hardy
https://bugs.launchpad.net/bugs/192930
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