More Awesome Than You!

Yes, well, I downloaded a lot which has me rather worried. I've checked, and all EPs and CC are secure and in the right place. And yet, I have this:
(http://i45.tinypic.com/9sw4z8.png)

I'm not so much concerned with fixing it (I can live without using that lot) as I am with why it is happening, is it a warning sign of BFBVFS, and how I might prevent it in future lots. And yes, I have tried taking out the lot and reinstalling it.

That means you have a texture missing- you do not have a terrain paint installed that the lot creator used. It is not a sign of doom.

See if you can either remove the blue by erasing with terrain paint tool, or else see if you can find the paint used for that lot.

Didn't work.

The thing seems to be more of an overlay, anyway. When I tried your suggestion, what I could see of the terrain paint under it went away. And as the camera moves, different parts of the ground underneath "poke through" whatever the hell it is.

We've known about this issue for a long time, it does look like missing texture to me, as the game will render any texture it cannot reference in luminous blue, sometimes flashing, sometimes appearing black. If you can't get the game to delete or overwrite it, I would recommend to contact the creator and inform them of the issue.
http://hideki.modthesims.info/showthread.php?t=142042&c=1&ht=&page=1&pp=25#startcomment

I had that happen to me on a lot that I made and had been using for the orphanage challenge at MTS. The lot had been around for ages when it happened. I put all the terrains and yard crap I had removed from my downloads folder back in and that didn't cure the problem. So I did the stint in a MTS help thread thinking I was nuts since the big "help" there was to back up the game, pull the neighborhood file out (It was Pleasantville) and fire up my game so it would regenerate a new Pleasantville. Of course the lot was no longer there which is why I thought this was some pretty stupid advice at the time. The new never used neighborhood was so pretty and useless without the lot I wanted to play. I did some other messing around and then put my original Pleasantville neighborhood file back in, fired up my game another time, and VOILA!! My lot no longer flashed blue.
You can try that if you want, but as I said before, I thought deleting the present neighborhood and using one without the borked lot was pointless, but I guess I had three fingers pointing back at me.