try check ur screen with service menu 1st..

1. *#*#7378423#*#*
2. Service test
3. Display
4. try to touch ur screen and view the display from white>black>red>green>blue>colourful.
5. see whether any deadpixel or what.. if not then should be got nothing.. maybe just apps problem
6. If ur device warranty still available then try to go service center hv a look if u feel want to get repair

actually i have this problem too on my xperia NEO when im open PaPaGo apps.. its located at upper right on my screen.. but on starting apps will occur.. but it doesn't affect my phone performance.. so i didn't bother about it..

if warranty had expired ady, i dont think service centre will bother u instead of they will charges u.. btw, u may go hv a try to visit service centre and see what can they do for u if really wish to solve it..

This post has been edited by ChuanHong: Jan 7 2013, 07:22 PM

xperia neo not bad.. im pass to my mum.. still very usable.. stock rom 2.3.4 with custom kernel (nightelf)..

overclocked to 1.4ghz (can up to 2.0ghz), for daily usage, viber, whatsapp, skype, fb installed. no lag.. not bad..

my xperia neo is back to stock .42 gingerbread OS is the best.. root it and left it got you tube and browser for me to connect into TV to watch movie only.. haha