Xchat cannot set transparent background

Hello,

I'm trying to set the background of the chat window (Xchat 2.6.4) to enable transparency. However, it returns an error "Cannot set transparent background. You may be using a non-compliant window manager that is not currently supported." Transparency elsewhere on the desktop works perfectly, xchat is the only application unable to set it. Is there something I have missed, or is this actually not supported under the current xchat release?

I am currently running Ibex 8.10 with kernel version 2.6.27-7-generic, with no kernel modifications.

Libraries xchat depends on:

striek@emmagan:~$ ldd /usr/bin/xchat
        linux-gate.so.1 => (0xb7f8a000)
        libpangoft2-1.0.so.0 => /usr/lib/libpangoft2-1.0.so.0 (0xb7f35000)
        libgio-2.0.so.0 => /usr/lib/libgio-2.0.so.0 (0xb7ecd000)
        liblaunchpad-integration.so.1 => /usr/lib/liblaunchpad-integration.so.1 (0xb7ec7000)
        libsexy.so.2 => /usr/lib/libsexy.so.2 (0xb7eb8000)
        libgtk-x11-2.0.so.0 => /usr/lib/libgtk-x11-2.0.so.0 (0xb7b1a000)
        libgdk-x11-2.0.so.0 => /usr/lib/libgdk-x11-2.0.so.0 (0xb7a8e000)
        libatk-1.0.so.0 => /usr/lib/libatk-1.0.so.0 (0xb7a72000)
        libgdk_pixbuf-2.0.so.0 => /usr/lib/libgdk_pixbuf-2.0.so.0 (0xb7a57000)
        libpangocairo-1.0.so.0 => /usr/lib/libpangocairo-1.0.so.0 (0xb7a4c000)
        libXext.so.6 => /usr/lib/libXext.so.6 (0xb7a3d000)
        libXinerama.so.1 => /usr/lib/libXinerama.so.1 (0xb7a3a000)
        libXi.so.6 => /usr/lib/libXi.so.6 (0xb7a30000)
        libXrandr.so.2 => /usr/lib/libXrandr.so.2 (0xb7a29000)
        libXcursor.so.1 => /usr/lib/libXcursor.so.1 (0xb7a1f000)
        libXfixes.so.3 => /usr/lib/libXfixes.so.3 (0xb7a1a000)
        libpango-1.0.so.0 => /usr/lib/libpango-1.0.so.0 (0xb79d7000)
        libcairo.so.2 => /usr/lib/libcairo.so.2 (0xb7964000)
        libfreetype.so.6 => /usr/lib/libfreetype.so.6 (0xb78ee000)
        libz.so.1 => /usr/lib/libz.so.1 (0xb78d8000)
        libfontconfig.so.1 => /usr/lib/libfontconfig.so.1 (0xb78aa000)
        libpng12.so.0 => /usr/lib/libpng12.so.0 (0xb7884000)
        libxcb-render-util.so.0 => /usr/lib/libxcb-render-util.so.0 (0xb787f000)
        libxcb-render.so.0 => /usr/lib/libxcb-render.so.0 (0xb7877000)
        libxcb.so.1 => /usr/lib/libxcb.so.1 (0xb785e000)
        libXrender.so.1 => /usr/lib/libXrender.so.1 (0xb7854000)
        libpixman-1.so.0 => /usr/lib/libpixman-1.so.0 (0xb7811000)
        libm.so.6 => /lib/tls/i686/cmov/libm.so.6 (0xb77eb000)
        libX11.so.6 => /usr/lib/libX11.so.6 (0xb76fc000)
        libgmodule-2.0.so.0 => /usr/lib/libgmodule-2.0.so.0 (0xb76f7000)
        libdl.so.2 => /lib/tls/i686/cmov/libdl.so.2 (0xb76f3000)
        libxml2.so.2 => /usr/lib/libxml2.so.2 (0xb75b7000)
        libdbus-glib-1.so.2 => /usr/lib/libdbus-glib-1.so.2 (0xb7599000)
        libdbus-1.so.3 => /lib/libdbus-1.so.3 (0xb7561000)
        libgobject-2.0.so.0 => /usr/lib/libgobject-2.0.so.0 (0xb7523000)
        libgthread-2.0.so.0 => /usr/lib/libgthread-2.0.so.0 (0xb751d000)
        librt.so.1 => /lib/tls/i686/cmov/librt.so.1 (0xb7514000)
        libssl.so.0.9.8 => /usr/lib/i686/cmov/libssl.so.0.9.8 (0xb74ce000)
        libcrypto.so.0.9.8 => /usr/lib/i686/cmov/libcrypto.so.0.9.8 (0xb7382000)
        libglib-2.0.so.0 => /usr/lib/libglib-2.0.so.0 (0xb72cb000)
        libpthread.so.0 => /lib/tls/i686/cmov/libpthread.so.0 (0xb72b2000)
        libc.so.6 => /lib/tls/i686/cmov/libc.so.6 (0xb7154000)
        libselinux.so.1 => /lib/libselinux.so.1 (0xb713a000)
        libXcomposite.so.1 => /usr/lib/libXcomposite.so.1 (0xb7135000)
        libXdamage.so.1 => /usr/lib/libXdamage.so.1 (0xb7132000)
        libXau.so.6 => /usr/lib/libXau.so.6 (0xb712f000)
        libexpat.so.1 => /usr/lib/libexpat.so.1 (0xb7108000)
        libXdmcp.so.6 => /usr/lib/libXdmcp.so.6 (0xb7102000)
        /lib/ld-linux.so.2 (0xb7f70000)
        libxcb-xlib.so.0 => /usr/lib/libxcb-xlib.so.0 (0xb70ff000)
        libnsl.so.1 => /lib/tls/i686/cmov/libnsl.so.1 (0xb70e6000)
        libpcre.so.3 => /lib/libpcre.so.3 (0xb70bc000)