Ok, trying this again:
There are certain lightning sources that are supposed to be blue but instead give off a very weird looking red glow in KOTOR 2. So far I've seen the issue in both Peragus and the Ebon Hawk. The glitch does not occur in KOTOR 1. I originally encountered the glitch playing using TSLRCM but after doing a reinstall I know the glitch occurs in vanilla as well. This is what the glitch looks like: http://imgur.com/9Epxobb
I'm using the Steam version on Windows 7, so I don't seem to have the launcher to generate the log file you guys often request. Here are my graphics setting (although tinkering with them has changed nothing):
[Graphics Options] Brightness=57 RefreshRate=60 Height=1024 Width=1280 V-Sync=1 Anisotropy=2 Frame Buffer=1 Anti Aliasing=4 Texture Quality=2 Grass=1 Soft Shadows=1 Shadows=1 EnableHardwareMouse=1 FullScreen=1 DisableVertexBufferObjects=1
The exe is in Windows XP SP2 compatibility mode, and my GPU is a Geforce 640 with the latest drivers available. Do you think this is a drivers issue?