This might be originating from Steam itself, but today I could not run this game at all. I had to kill the PeggleExtreme.exe process, see the game's Properties in Steam, uncheck the in-game Steam Community option, and then run the game.
Then it ran fine and I played a couple of levels.
But I definitely had played this with CXG 9.2 before, without resorting to that. Maybe the latest Steam update messed with something?
Ubuntu 10.10
Athlon 64 X2
nVidia GeForce 9500 GT
nvidia-glx-185