Mutter: a window manager for GNOME 3

These days you generally use XDMCP to initiate a session and run *all* clients remotely, from the WM on up. Many X11 thin clients are netbooted minimalist compact PCs (mini-ITX or the like) with no HDD. Canned setups are offered by LTSP and the like.

Remote WMs work pretty well - with modern WMs like Metacity at least. In fact, they're pretty strongly preferable because of all the GNOME communication stuff that happens via D-BUS, gconf, etc rather than X11.

Even if Mutter was to be run locally, though, that doesn't change the fact that you're often talking about a 700MHz Via C7 (or even a 500MHz C3) system that while it supports insanely fast hardware crypto doesn't have any hardware 3D support.