Well, no longer. The new Ubuntu release, lucid, with the latest gtk etc absolutely screams along. I'm seriously astonished that remote X11 can be this fast, given the round-trip-happy nature of the toolkits and the protocol's flaws. It's a real pleasure to use.
To everyone involved in gtk development - thank you!. Doubly so to those who looked into my bug reports on specific areas where gtk used excessive network round trips, particularly the Evolution compose window bug.
By the way, for those of you who deploy LTSP, another thing that'll make a huge difference to performance is to make sure your LTSP clients are on a private VLAN and then enable direct X11 communication between client and server with
LDM_DIRECTX = Yin
lts.conf. With this option you still use ssh to login and establish a session (so there's no godawful XDMCP to fight), but only the ssh login is tunneled and encrypted. During session setup, DISPLAY is redirected to point directly to the client's listening X server. This offers a huge performance boost, especially to slower/older clients without onboard hardware crypto engines. (Oddly, the 600MHz Via C3 boxes outperform the Intel Core 2 boxes when all X11 comms are encrypted).