Starting in Windows Vista, a lot of visual effects were offloaded to the graphics card. Consequently, the impact on system performance for those visual effects is negligible, and sometimes turning off the effect actually makes your system run slower because you disabled hardware acceleration, forcing operations to be performed in software.
For example, if desktop composition is enabled, then a backup copy of a window's entire contents is kept in video memory, even if the window is covered by other windows. Without desktop composition, the window manager uses the classic model which follows the principle don't save anything you can recalculate: The contents of an occluded window are not saved anywhere, and when the window becomes exposed, the window receives a WM_PAINT message to tell it to regenerate its contents.
This means that, for example, when you remove a window from the screen and expose the window underneath, the desktop compositor can show the contents of the underlying window immediately because it saved a copy of the window in video memory and has been keeping it up to date. On the other hand, if you disable desktop composition, you will just stare at a blank window underneath, and then you have to sit and wait for that window to repaint itself.
Congratulations: By disabling desktop composition, you made the act of uncovering a window run slower. (You will see the same effect when switching between maximized windows.)