I have seen this flicker as well when entering my password in app store but also when entering my passcode intermittantly.
Today, I decided to power cycle my phone and when it powered back up, the whole screen flickered between my background and teh apple restore screen - black screen with white apple and status bar underneath. The screen would flicker for a few seconds and then go to the black apple screen. The restore bar was not moving, so I don't think it was doing anything, just showing an incorrect picture. At each touch of the screen, it would flicker my actual home screen and would launch apps, etc based on where I touched. However, it was unuseable because the screen was still flickering a lot and defaulted back to the black restore screen after a few seconds.
I called vzw and we did a restore. So far, it is not flickering, but I'm not holding my breath.