Smart object layer glitch

When converting an existing layer to a smart object there seems to be some sort of glitch that causes the layer to become scrambled. I'm guessing it has something to do with the graphics card. Take a look at the video below and see if it makes any sense. I appreciate any help or ideas!
http://screencast.com/t/iutL74iGoAD

This same thing is happening to me, only when dragging in images from other programs (PS automatically creates a smart object from external images).
Creates an insane glitch pattern, in which I can see other, completely unrelated smart objects inside of?
http://cl.ly/3E1R1A281G0w

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