It's pretty unusual. Like I said, the only time I've personally seen this kind of effect is when someone creates a Windows Form app and accidentally misplaces the labels. If that were so, then every person who used that app would be seeing the same effect as you do.
Probably the only things that could cause this effect on you alone would be your OS settings, your monitor, or your graphics card and drivers. XP Professional should work by its default settings, and you said that the effect is duplicated at the standard 96 DPI dot resolution for your monitor. I'm not sure what it might be that is causing this, but the main area of focus I would invest in would be the graphics card (general incompatibility, bad drivers, bad Gfx software settings) or your OS settings.
Probably the only things that could cause this effect on you alone would be your OS settings, your monitor, or your graphics card and drivers. XP Professional should work by its default settings, and you said that the effect is duplicated at the standard 96 DPI dot resolution for your monitor. I'm not sure what it might be that is causing this, but the main area of focus I would invest in would be the graphics card (general incompatibility, bad drivers, bad Gfx software settings) or your OS settings.