1) Change the property "Force own texture" to true.
2) Look at the strange behavior:
<img src="http://img143.imageshack.us/img143/118/forcetexture.png" border="0" />
Develop games in your browser. Powerful, performant & highly capable.
Works OK here. What's your graphics card again? Enabling 'force own texture' uses render-to-texture, which was the source of many problems for many users (it was behind the "layout not appearing" bug and all the picture editor problems when it was OpenGL powered).
On my second computer (where the error occurs) I have Radeon X1300/X1550 Series with current display drivers.