This remains, and is more common now in the new RC.
It didn't happen as much before 1.20 RC7, but now it happens at least once an hour.
Teleporting anywhere, even a few meters away from you fixes this problem, which means to say that it's something to do with the way SL renders things (as teleporting, the renderer is refreshed).
Problems that are common to cause this:
Changing the FoV.
Short freezes in frames.
Can this be sorted out asap?