Issue resolved (for me at least).
This bug occurs under very unusual circumstances. It's unlikely anyone else would encounter this but here it is for posterity:
1. it's essentially an INDENT problem
2. the textfield has Paragraph indents set up in the IDE
3. the indents are a negative value for the overall indent, and a positive value for the left-indent
4. the textfield is then populated with htmlText that includes UL and LI tags for bullets
5. the textfield is then styled with a stylesheet that gives the UL a negative left margin.
what's happening is that the paragraph formats are in some way conflicting with the css styling and causing a rendering engine error. If the streaks occur and you simply move the FlashPlayer window, the streaks disappear - indicating that it's a redraw region issue.
The solution is to remove the danged paragraph settings from the textfield properties in the IDE - they are not used anyway as they are overridden by the HTML/CSS. In our case, they were left in there by the designer who had manually typed in the bullet text etc when developing the designs. The production files were stripped of text, because the text is being populated from an external XML file, so the indents were never seen.
This was a real biotch to track down. I hope anyone who has the same issue will see this post and will save a bit of time.
I had a similar situation. What worked for me was changing my video card to use 32bit colors instead of 16bit. Hope this helps someone else because it was a very puzzling problem.