Update: Nvidia has recently issued a new beta driver which is supposed to address most of the performance problems seen with KDE4. It can be downloaded in 64bit and 32bit versions. You need to add some options to your xorg.conf and enable certain feature at runtime, see this post on the NvNews forums for details. Note: Only install beta drivers if you know what you are doing.
Update 2: NVIDIA have released a new version 177.68 of beta drivers which fixes a couple of bugs and should improve performance with the KDE 4 OpenGL compositing manager. More info and downloads here. The latest beta version is 177.70 and it should enhance performance when dragging Plasma applets and fix some text rendering performance and corruptions. More info here.
Update 3: NVIDIA's 177.70 version of beta drivers has improved support for RENDER operations with the same source, and destination; this should enhance performance in some situations, e.g. when dragging Plasma applets in KDE4. More info here.
Update 4: NVIDIA's 177.80 version of beta drivers out here; some performance problem were fixed.
Update 5: NVIDIA's 180.08 version of beta drivers out here; some performance problem were fixed. Also check here for the latest version of beta drivers.