In the Startup and Shutdown ->→ Background Services configuration applet make, make sure the Keyboard Daemon service ("Enables switching keyboard layout through shortcuts or system tray") is checked and in in the "Running" state:
If this diddoes not seem to have an effect, log out and back in. The settings should be applied afterwards.
For whatever reason this service is also responsible for propagating rate/delay changes to X11, which you can see live via:
watch -n1 'xset q | grep "auto repeat delay"' 