obviously people are not having this issue??
Untrue. I'm using 3.4a (unable to update to 3.4e due to limited connection speeds and limited connection availability) and can vouch for Gnome continually hanging on logout when using Compiz. I select Computer -> Logout, and before the prompted question even displays, I'm nearly complete in being stopped. I was only able to back out of this once short of pressing the reboot button, and I don't remember the key combination I used for it. It might've been a random selection of keys, for all that I can remember, that prompted Compiz to come back to order.
The only way I can successfully log out of Gnome is by changing the Window Manager to Kwin or Metacity and logging out normally via Computer -> Logout.
I'm experimenting with Gnome over KDE, and thus far prefer Gnome over KDE (eagerly awaiting KDE 4 for experimentation purposes), but this is a damned annoying bug, I'll admit.
I'm using an Nvidia 7600GS, Intel E6400 Dual Core, and 1gb RAM.
EDIT: And jonnyrockets, I would suggest you attempt this method if you're having a similar issue for the sake of seeing whether or not it works. I'd personally like to hear whether or not it does.