I believe power kernel 41 and above are meant to be all used with 1.3. I don't know why anyone thinks it's a good idea not to upgrade to PR1.3 for this long, honestly. I blame the fact that it sometimes forces you to reflash and all that noise people make about how PR(pick any #) broke (any random devel or testing app they had installed, or just any app that wasn't meant to work with whatever the update changed).

But just so you know, I occasionally have left over pixels (In the app menu, not anywhere else) that appear upon boot and only go away with a reboot. Very rarely, but I've had it happen. So I think whatever the problem is, it isn't gonna go away with updating. (At the same time, keep in mind the Power kernels after 40 [≥41] incorporated the kernel changes brought in by 1.3 anyway. So you're running PR1.3 kernel with power patches with the rest of the OS being 1.2... so things can get wacky. The only reason I'd think that's not the case is if you've used the power41-power45 kernels without the same problems.)