Bizarre screen distortion

Very strange problem running a java application on a 64 bit AMD Windows 7 laptop. The active window appears totally blurred and distorted. It isn't a subtle effect, it looks like some serious image filter is being applied. It isn't completely random, you can just about make out the content, it is blurred but also the shapes are changed. It definitely looks like a deliberate filter.

The title bar and borders of the window are fine, as are other windows and the desktop.

Going to the control panel and opening the Java window, exactly the same effect. All the other control panel items work fine.

Presumably the Java control panel dialog is written in Java. The laptop appears to be totally messing up Java windows.

It is a new laptop, but the Java program I am running has worked on it previously. Maybe Java got updated in the meantime, I don't know.

Anyone encounter anything like this?