When someone tries to create a new geometry the screen around where the line (or whatever object is selected) turns a dark gray (similar to the Algor background color). The machines having the issue are running ATI Radeon HD 4670 graphics cards. The problem wasn't happening last semester and we haven't changed anything since then as far as graphics drivers go. Attached screenshot should give a better description of what is happening. We've tried using several different graphics drivers and also applied the SP1 update but nothing seems to work.
Disabling the OpenGL option fixes the issue, but I don't think that is the preferred method to solve the problem.
What you are seeing has been reported by other in threads such as this one. This may have been fixed in 2012. You may want to download a trial of that version and test it to confirm whether or not your issue goes away.