So I’ve upgraded through two Ubuntu versions to 12.04. One problem was that it didn’t remember the desktop background, and while it would be set temporarily when I updated it, the standard Ubuntu background would return after restarting.
Looks like the problem is in /etc/lightdm/lightdm.conf, which is setup by default for Unity. Instead, it should say:
Now it all seems to be working correctly again. I presume this is a consequence of upgrading from old versions, and wouldn’t be required for a fresh Xubuntu installation.