I had the same problem with that version of Compiz, and I was told to disable the Compiz repository because their is a problem with that version working and roll back to the DVD version of Compiz and emerald for now.
I had a massive amount of problems too, but eventually by almost blindly doing things i got it to work… I’m happy with it, but it’s about the same as the default on the DVD so no big loss if you have to downgrade.
I’d recommend reinstalling the 177.80 driver, then doing the compiz 7.8 one click install again. If you know your driver is good, then just reinstall compiz 7.8 then make sure your window manager is running ok (compiz-decorator --replace or metacity --replace (I found if compiz-dec messed up then gtk-window-decorator would mess up too, but metacity would be unhindered.))