I had read that upgrading my Kubuntu installation to Edgy Eft from Dapper Drake entailed risk of breaking the X Server. So I made sure that I uninstalled X server and explicitly installed it with the upgrade. That worked. However, Beryl broke. My understanding was that the problem could be because AIGLX was now inherently supported by Edgy unlike its previous versions.
I started reinstalling Beryl, by using simple and clear instructions by VemeC. The difference this time was that we created our own Beryl session by creating Beryl.desktop. So, when I restarted by X Server, I explicitly chose Beryl as the session type and not KDE. Note that the Beryl start script internally uses KDE itself.
I still had the problem that window titles were not being displayed and hence could not be moved or resized at all. After some digging around I realised that the linux-dri-modules were not compatible with the kernel I had. After some more digging around I found the solution that worked. I am still not sure if this will work for everyone!
sudo apt-get install linux-headers-`uname -r`to download the compatible headers.
UPDATE: Some more tests revealed that this is not required. The issue is somewhere else, investigating.
UPDATE: What is working for me currently is to change the Window Manager to KDE, switch back to Beryl and restart the X Server. Still investigating.
The two differences I found was using Beryl session type which involved starting Beryl before KDE,
and downloading the compatible Linux headers. So I am back with my 3D desktop on my Dell Inspiron 700m with embedded video card, still scoring over Vista.
UPDATE: Got it working completely now. I used the command
sudo dpkg-reconfigure xserver-xorg and selected the i810 video driver. A restart and the combination of Kubuntu/AIGLX/Beryl is working fine on my Dell Inspiron 700m.