The problems you're having are due to Radeons drivers. I ru a 7200 and havenever had any problems before I DL'd the latest drivers.

1. The manipulators are resized using the plus(+) and minus(-) keys.

2. That red line is due to the graphics drivers. They happen when you drag an isoparm across the surface, right? I get the same thing when I'm using a paint efects brush. Simply do what you need to do then rotate your scene slightly and it should remove the trils. Unfortunately, since it is so common among ATI users, I don't think there is any fix for it, it's just the drivers lately. Unless you can revert back to earlier drivers I think you're stuck with it.