--I did some more testing. I uninstalled, rebooted, reinstalled. No help
--I tried opening up safari 3.1 in full screen mode instead of coherence, and then changing to coherence, and the same problem still occurs. Keep in mind Safari works fine in full screen mode, just not coherence.
--I tried uninstalling Safari 3.1 and installing 3.0.4 instead. Same issue occurs.
--If I have another program fully maximized like word or IE behind Safari, and click on different links in Safari, it seems to work ok (other than the top of the menu bar disappearing, but when you hover over it, it comes back).
--I tried removing the background that i have in the Windows XP session and using No background picture, then going back to Coherence mode, but the same problem still occurs.