I tried to take some pictures of it,but the they don't turn out very well. in answer to your questions:

1. Yes, it does. It is more noticeable in the background objects, however.

2. It only appears on movies.

4.It does freeze.

I know this sounds exactly like Mpeg artifacting, but why does it show up when the DVDs I usually test
are not supposed to have mpeg artifacting It seems that when I have the Noise Reduction off, everything has sort of a 'bright edge' to it...However, when I look at it from an angle (off to the side) it looks better...I know that is vague sounding, but I can't think of a better way to describe it. Could it be that it is an LCD projection tv and not regular projection?