In my case it seems both - desktop effects enabled AND auto-hide KDE taskbar are needed to cause the problem. The one or the other alone are not causing it.
That is exactly what is happening on this system. It would appear that desktop effects are causing a conflict. Perhaps a future update will address this issue. In the meantime, I have set the KDE taskbar panel to "always visible", and "windows can cover".
Lenovo G560, Intel P6100 2.00GHz, 4GB DDR3 SDRAM, 320GB hard drive, Intel Graphics, PCLinuxOS KDE 2011.6
Clay can not make demands on the potter, but the condition of the clay can impact what the potter decides to do with it. -- R. Kelvin Moore