What is that circle thing in the middle of pictures?

Just upgraded to CS 5.5 from CS3.
In InDesign, when I drop a picture in, what is that circle thing in the middle of the image when I move my mouse over it? If I click it, it switches to a direct selection of the image. That is damn annoying. Can I turn that off?
Also, when I rotate a picture using the Rotate 90° Counter or Rotate 90° Clockwise buttons, it's not rotating from the center. It's rotating on the upper left corner.. if that makes sence. Can I fix that somehow somewhere?

Easiest way to avoid it is click anywhere else in the box except the circle, takes some getting use to annoyed me the first week or so as well. Not sure if it can be disabled.
Also, if it's rotating from a point other than center, make sure the center black box is selected on your attributes bar reference points next to the X Y W H selectors, it determines where you rotate from.

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