One of the biggest strengths of Ubuntu is the degree to which it can be customized. Most people leave things approximately where they are, however with the correct know-how and dedicated time you can customize your desktop to a high degree and make it operate EXACTLY how you want.
In the newest release, Ubuntu 11.04 Natty Narwhal, a new desktop environment was chosen over Gnome called Unity. I personally don't like Unity because of how locked down it seems. You can still upgrade to 11.04 and choose "Ubuntu Classic" when you log in, but it seems like Ubuntu 10.10 is a perfectly fine release and I see no reason to upgrade unnecessarily (if it ain't broke, don't fix it).
For that reason, this guide/tutorial is going to be written for Ubuntu 10.10 and earlier, or for that matter any Gnome 2.x distribution.
So then, to get started: when you first install and log in, you should see a screen like this: (with the exception that mine is running in Virtualbox)
In a word, BORING.
I'll explain how to go from that to this:
The things that I'm gonna be changing are mainly dealing with the look of the OS, not the functionality, as that would be an entire different post.
I'll cover how to change the background, the theme, the cursor theme, the screensaver, the panels, the icon themes, how to add panel applets and a few other useful things.
First off you want to get yourself some new themes. Check out http://www.gnome-look.org and look under "gtk2.x" for a theme you like. Once you find one (mine is called divinorum revisited or something like that) download it and save it somewhere (a folder in your home folder called "themes" is suitable. Then right click on your desktop background, and click change desktop background. open the "theme" tab, and click "install". navigate to your newly downloaded theme (should be .tar or .tar.bz2), double click, and it should install. Depending on the theme it will ask you if you wish to apply it. A trick is that themes can be somewhat mixed and matched. You can use the controls of one theme, the window border of a different theme, the icons of a different theme, and a cursor of a different theme, all of which are installed in the same way. To customize those aspects, click on any specific theme, then click "customize" and you will have all the options to customize the theme. Some will let you customize the colors of the windows, some won't.
Now about the panels:
You can leave the panels as they are, but they're pretty ugly. I would always choose to make them transparent by right clicking on them, going to properties, then background, then choose solid color and make it all the way transparent. If you wish to get rid of the shadow on them open up compizconfig-settings-manager (sudo apt-get install compizconfig-settings-manager if you don't have it already), go to "window decoration", go to "shadow windows" section and click the little "+". click "invert", then click grab and click on your panel. It should then exclude the panel from the shadow window decoration.
Things I find to be very useful on the panel are the system monitor, set to a width of 100 pixels and update interval of 200 milliseconds, a main menu (not the custom one with the "applications places system" menus separate), the weather applet, the notification area, the volume/mail applet, the date/time, and the user control (log out/shutdown thing). Using just these, and no bottom panel I have no problem switching between windows using the scale function and alt-tab (ring switcher FTW), and have a beautiful and uncluttered desktop.
In addition, I would highly recommend installing desktopnova (you can find it in the repositories), and finding a bunch of good wallpapers for it to cycle through at regular intervals. More information to come, ask some questions if you want to know more about which themes I used and how to do what and whatnot.
Keep it real.