Mark Howard (https://bugs.launchpad.net/ubuntu/+source/xchat-gnome/+bug/288468/comments/3) was able to track where the 'transparency background' setting sits. I just confirmed it works as a workaround.
Use gconf-editor, browse to apps/xchat/main-window, and change the 'background_type' key from 2 (transparency) to 1 or 0. xchat-gnome works fine after that.
Mark Howard (https:/ /bugs.launchpad .net/ubuntu/ +source/ xchat-gnome/ +bug/288468/ comments/ 3) was able to track where the 'transparency background' setting sits. I just confirmed it works as a workaround.
Use gconf-editor, browse to apps/xchat/ main-window, and change the 'background_type' key from 2 (transparency) to 1 or 0. xchat-gnome works fine after that.