What you are seeing is not what a standard out of the box Mac would do, and instead a preference SWMBO set. It's called Exposé, and is meant to give you a view of all open windows to allow you to find the one you need. By default, it only activates when you press F3.
The particular preference that SWMBO (or someone else) set is located under the Apple Menu (upper left), System Preferences, Exposé & Spaces, and then the section "Active Screen Corners" on the Exposé settings tab.
I personally use this feature at work to lock and turn off my display by moving my cursor to the far upper right, or at home to turn off the display when I step away. I keep Exposé bound to keyboard commands.
And yes, those two lines indicate something bad with the display. Likely a bad connection (a very tiny one) not relaying the full RGB commands to that row of pixels.