Basically whenever i move my mouse up to the top right corner of the screen while playing the game there's a window flashing in the background which appears to be another program but nothing else is open i know it has something to do with Steam because there's some text on it at the bottom of the window.

Disable the steam taskbar in the settings
Also, a problem I had with Fallout 3 was that it would flash white whenever my background changed (Windows 7), so that may be the case as well. You could try just having 1 background.

On Windows Vista, playing Fallout 3, i had the same problem with the Sidebar. on the right side the shape of the sidebar would flash for a few seconds. and it would happen every once and a while. If i closed it before playing everything was fine though.

Thank you that's exactly what was wrong.