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:
I'm using the Steam version on Windows 7, with the exe in Windows XP SP2 compatibility mode, and a Geforce 640 GDDR5 with the latest drivers available. Do you think this is a drivers issue?