Check your settings in Ubuntu. The default has a lot of compiz bling and is a real resource hog.

I just tried the same with my ati card and it worked pretty well. With one session it's 55 fps at the login screen and with two 18, which is playable

The video card and drivers may be the problem. I had an old nvidia card before and it also got pretty jumpy when running more than one 3d app at a time, even simple things.
Maybe enabling vblank, vsync, "sync to vert refresh" or whatever they call it would help ..but that's just a guess. It's probably an option somewhere in the nvidia control panel.

If you want try to disable the bling set settings->appearance->visual effects to none

I also just tried it with two clients (one only at login screen) and it worked quite well as long as compiz was disabled. When compiz was activated, the frame rates dropped rapidly.

If you're searching for an easy task to disable or enable compiz-fusion, check this out: http://forlong.blogage.de/entries/pages/Compiz-Switch

Tested it on an Intel C2D E8400 at 3,0 GHz and a Nvidia 7800 GTX (256MB) graphics card.

Oh.. so the desktop effects actually made a difference.. cool!

AFAIK the best you can do is alt-tab to window mode if you want to get to the desktop.

err crap .. I meant alt-enter

I'm also using alt+enter and afterwards alt+tab.
Unfortunately, it's sometimes quite buggy.