Thanks vn800rider.
That thread had another link...
http://forum.cyberlink.com/forum/posts/list/4388.page#16829
...which suggested that when you use a custom background image, and experience this bug, applying a video effect other than "no effect" will fix the problem. And it did!
I set the zoom effect but set the slider all the way to the left (no zoom). And that fixed it.
However, being a software developer myself, I don't like the fact that this bug exists in their software. This is the kind of bug that costs their users money and time. In order to see if the bug appears or not, you have to burn a DVD. DVD's cost money and take time to burn. Only after you have burned your DVD can you tell if your work-around fixes the problem.
I have had to burn 3 DVD's. I know, they aren't that expensive. But my movie is over an hour long. It takes a long time to burn. So there is the question of the cost of my time as well.
If such a bug existed in software that I had written (one that costs my customers money), I would consider it an extremely serious bug and a top priority to fix. Bottom line, I would have a hotfix patch for within 24 hours for my customers. I would consider that my duty and responsibility as a software vendor.
Just my two cents.