Graphics issue around cursor

[virtuallyunlimi]

Hey all, I have a slight issue with XBMC and graphics. There seems to be a graphics issue where a square box graphics glitch appears around where the cursor is whether it is hidden or not. I am using XBMC with just the keyboard. I can move the cursor and the box will move. This happens when going through the menus as well as in movies. This happens in Atlantis 8.10 as well as the daily builds that have been put out recently. I am running an Nvidia 6600GT AGP with the latest drivers on XP Pro SP3. I have not seen any graphics anomalies in any other programs ever. I have tried forcing Vsync on and off as well as letting the app decide and still no joy. Included are the screen shots of the issue You can see the pixelization in the cats back.:
http://pics.bbzzdd.com/users/virtuallyunlimited/IMG_1741s.JPG
http://pics.bbzzdd.com/users/virtuallyunlimited/IMG_1743s.JPG

Thanks all