Why are notifications so low?
This was a change in Ubuntu 9.10 (Karmic).
The space above is left intentionally blank because it is for "confirmation" bubbles: for instance volume, screen brightness, etc... (often controlled on keyboards buttons on using laptop buttons).
"Notification" bubbles appear in this space slightly further down.
Not everyone likes this, but this is the way the powers that be want it...
You can customize their placement and appearance: http://www.omgubuntu.co.uk/2010/06/customize-the-ubuntu-notification-bubbles/