Don't know how I managed it really, but all of a sudden since this afternoon my Gnome desktop seems to be performing back to normal. What a relief.

I suspect that it had something to do with some weird mismatch during the upgrade where my previous private settings messed things up for some reason.

So what I did is this. Delete all of the dot-directories located in my home directory that looked like they had something to do with gnome, like .gnome, .gnome2, .gnome2_private, .icons, .themes, .gconf and .gconfd using good old rm -rf.