modesetting driver to blame?
 

Interestingly enough the slowdown appears to be caused by the modesetting driver the new Xorg uses for Intel cards by default!
I explicitly configured the old driver in my xorg.conf and it seems to work fine again!

Section "Device"

Identifier "Card0"
Driver "intel"
BusID "PCI:0:2:0"

EndSection

Apparently there is some bad interaction between the modesetting and DisplayLink drivers. This should be addressed as the modesetting thing is now default in many distributions.

I'vre tried your workaround but id did not work. But I may have done something wrong. Here's what I did. I edited the file /usr/share/doc/xserver-xorg-video-intel-hwe-16.04/xorg.conf which looked like this:
and I replaced it with your code. But maybe Card0 and the bus address are not correct on my machine, or I've edited the wrong file. Can you help me with that?
Thank you

xorg.conf
 

I actually used `# Xorg :1 -configure` to generate a config file. Strangely enough it did generate a config file with the intel driver not the the modesetting driver. Then I just copied this file into /etc/X11/xorg.conf

It's using the old(?) config style where all options are in a single file, so perhaps it's not very future-proof and it might break with another update. For a reference, here is the generated file.

I am getting around the slow graphics when I am turning on the Laptop display additionally. But I always have to reconnect the dock after X started. Things were working with 4.4 and older driver.

Same:
Thinkpad T430u (intel graphics - modesetting)
Thinkpad Dock USB3.0 Basic (latest drivers)
Ubuntu 16.04.02 - 4.4.0-65-generic #86-Ubuntu

Mouse movement is smooth, but keyboard input lags (on external displaylink screen).

Strangest behaviour I see, when I let the e.g. chrome window overlap just some pixels into the laptop screen, the lag (while typing into the addressbar) is not there, or at least less. If I pull the window completely on the external (displaylink) screen, it lags like 1hz.

For me with ubuntu 16.04.2 it doesn't work too. It worked with 16.04.1

Can somebody @DisplayLink like mlukaszek tell us if anybody is taking care of this issue? Because it seems impossible, or at least I don't know how, to rollback to the stable situation. Thanks a lot.

It seems that the workaround described here http://displaylink.org/forum/showpos...98&postcount=1 attenuates the issue. Currently I've connected the external monitor and it seems to work, even if it is not super smooth. Even if the "hot swap" connection of the monitor makes the session crash and disconnect, coming back to the greeter page.

Got it working
 

jerrinot's method worked for me! For anyone confused, my xorg.conf file in /usr/share/doc/xserver-xorg-video-intel-hwe-16.04/xorg.conf looks exactly the same as giuliocoluccia's. I did not edit that. I navigated to /etc/X11/ and ran the command "sudo gedit xorg.conf" to create a new file and then copied and pasted jerrinot's file (this file ) and saved it. Restarted my computer and now there is no more lag on either of my two monitors. I had to go to System Settings > Displays and fix some issues cause for some reason it had my built-in display inside the HDMI monitor and the Display Port monitor was turned off.

HOWEVER, sometimes Chrome does some strange flashing. It's not often but it is happening. But no lag, scrolling is super smooth, no problems other than the occasional flashes.

My setup: Ubuntu 16.04.2 on a Dell XPS 9350 using a StarTech USB3DOCKHDPC. I have one monitor connected to my USB-C port via HDMI, and one monitor connected to the docking station via Display Port. I could try the HDMI cable in the docking station, too...but I'm kind of scared to after spending so much time trying to get my dual-monitor setup working. XD

UPDATE: Finally plugged in both Display Port and HDMI to docking station. Both monitors working fine. Ocassional flashing still there though. My PC is getting hot now and the fan is pretty loud.

So, I started with the problems all the other people her have with Ubuntu 16.04 on the current XPS 13 version with a D3100 dock.
After multiple steps of debugging and upgrading with all variants of states from having no monitors, not being able to type (that was a bummer) I'm now at the state fotografo described with the xorg.conf on 17.04 and everything seems to work, more or less smoothly.

This should be fixed in any way, I've spent up to two full working days just running around my notebook trying to get a ready to work environment back again...