I wonder if this is an icon that Explorer cannot find the .ico file for.
Can you right click the light blue square and check properties? If so, and if it is a shortcut, click "Find Icon" in the Shortcut tab.
If not a shortcut but a file in itself, it might be a file that has no program associated with it, and so Windows displays the default icon.
If the .ico file is corrupted, you could use Tweakui to rebuild the icons.
If it is an actual blemish on your desktop, have you tried changing the desktop wallpaper?
Just a couple of thoughts.
I consider myself somewhat computer literate but I can't seem to fix this problem. I just bought a new 17" flat panel monitor 5 months ago. All of a sudden, I've got a light blue square block (1/2") that has appeared. There is also a small vertical line at the top. It just appears on my desktop but never seems to appear when screensaver is on or I'm surfing the net. It also doesn't seem to be a pixel problem.
Does anyone know how to correct this. It's irritating and I've looked for answers to the problem but no luck. I'm also using Windows XP Pro and have not downloaded SP2 yet.
Thanks for your help!!