This problem has been perplexing me for several months now, ever since I upgraded my server to 12.10 Quantal. Finally found a solution (Can’t remember the site where I found it though)! These are the instructions for a profile that’s already been configured that no longer works.

  1. Open the NX Client for Windows (in my case).
  2. In the Session section, select the session profile you originally created, that no longer works.
  3. Click Configure.
  4. Under the General tab, and the Desktop section, ensure that Unix and GNOME is selected.
  5. Now, in the same tab, in the Display section, check the box next to Use custom settings, and click Settings.
  6. Under the Performance section, check the box next to Disable the render extension.
  7. Click Ok, then on the next screen, click Save and Ok.
  8. Now try to connect!

Worked for me at least.