It acts the same with the compiz-fusion visual effects enabled or disabled.
01:00.0 VGA compatible controller: nVidia Corporation G70 [GeForce 7300 GT] 
(rev a1)

I think the problem lies within nautilus or gnome itself, an interchange of the 
nautilus or window background colour and the selection colour in the themes. I 
use a customised version of a theme:
controls: clearlooks
colours: selected items background: #464646 text: #E8E8E8
window border: human
icons: human
pointer: default

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moving files using mouse alters / flickers nautilus window background
https://bugs.launchpad.net/bugs/205649
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