It's a random critical hit. You have to be good with blade, score a hit to the upper body (with a blade, obviously), and hope that it's your lucky day. Alternatively you go into concentration mode (UV modifier + UV attack, if my memory serves me correctly). Then, if you land a hit on a target, it's guaranteed to be a critical.
What kind of graphics glitches are you having? The one I had was caused by not using the correct skeleton. Make sure that the skeleton.nif in your Data/Meshes/characters/1stPerson matches the one in the UV II package. Other than that, I didn't notice many graphical glitches. Definitely not "a lot".