I encountered this bug with the first version of WME I used (1.8.1) and the most recent. I've not tested it on 1.8.2 though. I've mostly used the included demo to examine the bug.
The included screenshots will probably describe it better than I can. I see a lot of lines originating from a point in the upper left corner. The image is not static, and flickers a lot.
This usually occurs 2-3 seconds after I've started the game, however, it sometimes happens immediately, and almost always immediately within WME's editor windows.
This only occurs when 3d acceleration is used. Theres no difference when using DX9 or DX8, or Hardware T&L.
If I turn on 2x or 4x AA, the problem is almost completely gone, though occasionally there will be a flicker.
Whether this is related or not, I'm not sure, but when I run the game in full screen, I get a nearly constant framerate of 60fps, but in windowed, it reads as 1600fps or more. If AA is turned on I get around 800fps in Windowed mode.
The nature of this bug makes WME practically unusable for me. To be honest, I really don't know if it's a problem with WME or my video card. Most everything else works fine on my video card, from Blender, to Bioshock. So I'm not sure what's going on.
I'm running a freshly installed Windows XP Home SP2 with all updates installed.
Here's a brief rundown of my system specs:
Nvidia Geforce 7900GT (256.0 MB)
Forceware Drivers version 163.75
Intel Core2 Duo e6750 (@2.667 ghz)
2 Gigs of Ram
Desktop Resolution of 1680x1050 @ 32bit @60hz
The bug also occured on my older computer, which had a completely different motherboard, ram, and CPU (Athlon X2 4200+) - however, the video card was the same. I thought the bug could be related to having multiple cores, but confining the affinity to just one core makes no difference.
If theres any more information I can provide, please let me know. I would really love to use WME for my project.