Comment 85 for bug 186382

XGL is an X Server project implementation (like Xorg,XFree86) and actually, there are two Xgl forks : XglX and Xegl... when whe do "sudo apt-get install xserver-xgl" : we install XglX that still relies on Xorg ... (and so still use X nvidia module)... XglX catch all 2D and 3D operations of the X protocol to a glitz wrapper that use OpenGL (and 3D hardware acceleration) for 2D and 3D rendering too(contrary to Xorg that event if nvidia driver are installed, it uses 2D Hardware Acceleration for 2D Drawing and 3D Hard. acc for 3D drawing, but today, via openGL, we can use 3D Hard.Acc even for 2D drawing that is more efficient)...
To speak basically the concept of XGL is good and bring better performances, but XglX is only a draft, the "true XGL" will be Xegl that will have no more dependency with Xorg....
All that to say :
1/ using "Xgl is not a bad thing"
2/ Xgl continue to use the embedded nvidia GL library (and the famous libwfb.so), but the container (The X server implementation) that load the wfb module is slightly different and that's why everything goes well with shadows under XGL. (to convince, you can scan your Xorg.0.log and you will see that's the nvidia libwfb.so is still loaded)...

For the keyboard layout try to add in Xorg.conf (at the "input device" section):
Option "XkbLayout" "fr" (change "fr" to other thing if you're not french)

I Think that's the pink shadow problem comes from the fact that the libwfb.so has been compiled for a bad version of Xorg (7.199) instead of the 7.3, only (seeing your Xorg.0.log never lie..).