Have you tried starting the system up in Safe Mode - does the problem still exist when running using the Safe Mode option?
Have you made any updates to the graphics drivers, or installed any new programs recently?
Does the blue circle appear when you right click on the icons on the desktop, the desktop background, task bar / clock etc?
What were the last programs you installed before you noticed the problem. Also include any programs you installed without restarting the machine (not sleep / hibernate, a power off and back on, or actual reset)