It looks like a touchscreen laptop (tablet) running windows 7.
I had troubles similar to this with my wife's HP touchscreen laptop and they ended up replacing several parts of the device. It was primarily related to an improperly cooled AMD CPU, but the video system was messed up as well.
But I'm not sure your's is the same issue. Unfortunately, it's difficult to be sure.
It appeared to me, when I had the similar issue, that the touch screen itself was reporting incorrect touches, always at the same place. The cursor would give a grey circle which, as techie007 noted, indicates a touch-hold interaction which allows you to bring up context menus, like a right-click would do when using a mouse, along with the little star.
The star icon to the lower right indicates stylus input. The fact that you're getting this star when your stylus is holstered indicates the touchscreen itself (probably Wacom) is registering false touches.
You may try installing or reinstalling the most recent service pack, making sure your drivers (including the touch screen) are up to date, and making sure you've got the most recent windows updates. If the issue persists after doing all this, I'd contact the manufacturer, if the laptop is still under warranty.