Hi,
Before starting let me tell you my system configuration. It is AMD Athlon 64 X2, Nvidia based chipset with onboard Nvidia 6100 Graphics, 1 GB RAM. Yesterday I downloaded and installed Compiz Fusion 0.5.2 on my opensuse 10.2. Enabled XGL and the compiz was working fine. I have read that enabling XGL would reduce the frame rate in 3d games. My normal frame rate with nvidia is 1800 by running glxgears. I checked the frame rate after installing compiz and expected to see a frame rate of 500 or so. But I was surprised at the result. The frame rate didn't go down and to my surprise I am now getting a frame rate of 2800 to 3200 . I then thought the problem was with the glxgears so tried a game called Lore Invasion Demo(from Garage Games) which requires a a good graphics card. It was working better than before. The next thing I did was to check glxinfo. This was another shock to me. It showed direct rendering as off . Whats happening with my system? I am happy to see such an increase in frame rate but i am seriously confused. Any idea what happened?

I had not heard anything about expecting a decreased performance, and I have experienced exactly the same results as you have (on what sounds like exactly the same hardware).

As to the direct rendering question: One of the options which you set in starting Compiz is almost certainly --indirect-rendering. It is my understanding that this is necessary to enable textures, though I am not certain of this.