Comment 43 for bug 89786

Well, here is the procedure I fixed the bug in my machine..
Step 1. System--> Preferences-->Desktop Effects: Uncheck the box for "Worspaces on cube" (Assuming, desktop effects are ON)
Step 2: Close the Preferences Window, this should reset the settings, and now you can see only one Workspace in panel
Step 3. Right Click on the workspace panel--> Preferences
Step 4: Increase the number of workspaces ( I set it for 4), and close the preferences window
Step 5: Go back to System--> Preferences-->Desktop Effects: Check the box for "Workspaces on cube"
Step 6: As a precaution, first click on Workspace 2, to check whether cube effect is coming or not. If not, try your luck again. :)

Now test it by moving some window, it may take few seconds to move it, but keep dragging.

Conclusion: For me, it seems that the code is conflicting between number of Workspaces and Desktop effect... so first enable the desktop effects, then set the wobbling effect... then set the number of workspaces, and then set the cube effect.
Your setup may again break if you increase or decrease then number of workspaces. If it happens, repeat the steps from 1 to 6.