Although I have no idea which mod has caused that; the actual problem is easy. For some reason the nif/shader is using the wrong alpha blending for the texture that's being used. So either the nif's been changed, or the texture's been changed (the resolution of the texture looks fine to me btw), or both, but they're no longer "in sync" for what the nif expects the texture to be like and what the texture is actually like. If you can track down the texture, you could easily fix it by opening it in Gimp, and using the "colour to alpha" option and use black "000000" as the colour to switch to alpha. Or find the magic effect nif and change the NiAlphaProperty flags to something more appropriate (not quite as simple). Not so sure about magic shaders; never looked at them.
Et voila, fixed.
Vac
Thanks for the comments Arkngt and Vac.
@Arkngt: I'll look more into what night-eye/detect life mods I have applied. I was on a binge of texture replacer mods a while ago, and have now forgotten what mod added which feature. BAIN will come to the rescue again.
@Vac: Do you know the path for the magic effect texture or mesh? Maybe I'll just delete anything that is overwriting the one from Oblivion BSA and see if that solves this issue. WIll help me identify the mod as BAIN would then show that package as red with missing information... I am assuming the original nif and texture are present in the Oblivion BSA so that I have the original to go back to...