I think I've solved it.
Basically, for some reason Windows did notify my application that it had to clean the window background (which makes it the default window color, usually light gray) - but then it didn't tell me to redraw the content. So now, when I'm getting a "clean background" notification, I'm sending a redraw notification to myself...
Anyway, this seems to work, and in the process I've been able to remove some unnecessary redrawing that I had added in the past as a workaround for this problem (at the time I didn't really know what the problem was). This reduces the flickering which occurs when dragging another window over the Stereo Tool window, or when the Stereo Tool window is moved into the screen.
Winamp DSP plugin:
http://www.stereotool.com/download/dsp_ ... r_BETA.exe
Stand alone version:
http://www.stereotool.com/download/ster ... r_BETA.exe
Command line:
http://www.stereotool.com/download/ster ... d_BETA.exe
VST version:
http://www.stereotool.com/download/vst_ ... l_BETA.dll
This version is still tagged as 4.02, but this new redrawing behavior will be available later in version 4.03. Note that there's also a change to the audio processing w.r.t. version 4.02.