Version:           3.5 (using KDE KDE 3.5.0)
Installed from:    SuSE RPMs
OS:                Linux

I'm running x11 composite mode with kde 3.5 on suse 9.3 and it works great.  (novell provided the rpms.)

This may/may not be one or more issues.  I'm happy to provide more information if necessary.

This is one example of the behavior:
1. Default transparency behavior in kde 3.5. 
2. Have Konqueror open on some website. Konqueror is opaque. (active window)
2. Click on link to download file.
3. Konqueror window becomes inactive, (goes transparent) while the file download location message box opens as the active (opaque) window.  Choose location and hit "okay."
4. File downloading progress box opens and keeps Konqueror inactive(transparent) until I click on the konqueror window.

In this example, I believe after I choose the download location, konqueror should return to the browser window while the download progress box opens/closes as an inactive window on it's own.

Many kde applications have message boxes popping up before/during/after a process is complete that behave in a similar manner.  The message box will take over when I really want to work in the application.  With many tasks/windows open message boxes stealing focus gets a little confusing.