I'm seeing this as well. Fullscreen in the standalone client doesn't work either (static window-sized image is left in the corner of the screen). I don't see this "normal" display mode option to try.
Do you use the 10.4.x version of OS as well? Or can you tell us on which system you are, which mac do you have? PPC or Intel?
Does the small static window appear each time you switch to full screen mode? It happens sometimes on my MacBook Pro, but unfortunately I can't seem to reproduce it each time to understand how to fix it. If on some configurations (yours) it happen all the time, it could be good way how to find the problem and test possible fixes.
Do you use last version of ES? 2.7b33?
I started another thread in user user forum since it seemed like a more appriopriate place. (spam filter won't let me link)
The small-image-in-corner issue is very consistent in the standalone app, though there's some variation. As the window expands to full screen it consistently tracks the bottom-left corner of the window. Upon reaching full screen it sometimes stays in the bottom left and other times pops to the top left.
running 2.7b33 under 10.6.8 on a MacPro, for reference.
the setting's name has changed. look under the "display" tab, and set "interpolation" to "off".
Thanks. Changing that didn't help anything though :/