Video is displaying in negative

I have an intel iMac 17" bought in February. My kids logged on this morning to find that the video is displaying in negative, like a film negative. I first thought that maybe they downloaded some kind of skin or little app that let you change the look of the interface, but after I booted up WinXP in Parallels I found that XP was also affected.
I then tested to see if the OS itself was defining the color-reversal by taking a screenshot, then printing it on a color printer. The color print came out normally. This suggests that the video card is the problem. If so, how do I fix it? I did check Software Update to see if there are any upgrades I need to install. The only thing that appears is the iMac EFI Firmware Update. I am going to run this now, and if this cures the problem somehow, I will post that the problem has been resolved. If not, then the problem still exists, and I would appreciate any help or suggestions to fix the problem. (This is the wife's Mac, and she ain't happy. Know what I mean?)

Here is more research.
After installing the EFI Firmware Update, the computer rebooted, and came back to the login screen. It was there that I realized that the login screen and background displayed just fine. I logged in to the main user, and I saw the screen initially flash with the correct colors, then immediately turn negative.
After seeing this, I created a new user with full Admin privileges, and logged into it. The display was normal in the new user. So this appears to be some kind of preference problem, possibly a corrupt preference. But which one? Anybody know what I need to delete or change to fix this issue?

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