I have a box moving around on a terrainblock. When I am moving I see what I can only describe as a ripple about 1 inch high which goes down the screen about every 5 seconds or so. If I am not moving I do not see the ripple. I am moving the box and camera by just setting their localTranslation. I have verticalSync set to true and I am always getting around 60fps.
Please provide a testcase 
After running TestIsland and a few other apps I have found that the problem is my computer not JME. I am getting the ripple affect on all JME programs and in TestIsland the skybox sometimes has small black spots appear and disappear while rotating the camera. I recently updated my 8600GT drivers so I think that may be the problem.
From the Compatibility list:
GeForce 8600 Go
Mac OS X 10.4.9 MacBook Pro
Everything works.
The card should be fine… you sure you have latest drivers correctly installed… Let us know how it turns out in the end… 
I am running windows Vista. I am going to reinstall my drivers when I get home tonight and see what happens.
Well I have tried the latest drivers, dell's latest drivers, and some other drivers but I am still getting the strange affect. I see it mostly when I look at the skybox and rotate the camera. I need to hook up my other pc and compare it to that. I don't remember this affect a month ago, but I may have just not noticed it.
The card is a 8600m GT for windows vista 32 bit
I did a little digging on this and it is possibly a bug in the nVidia OpenGL drivers… of sorts… and might affect more cards than just yours… anyways here is a link to some info: http://keyj.s2000.ws/?p=67. Be sure to read the comments also.
Anyways one thing you might want to try is turn off threaded optimizations in the driver… Try out the test app and see if you also get the wrong behavior… Hopefully this will be of some use…
PS… someone more experienced should probably also comment Perhaps this GL call is not used all the time and I am just jumping at nothing…
Turning off thread optimization did not help. I found it is very noticeable in windowed mode, but barely noticeable if at all in full screen. As to more specifics about the problem in windowed mode the ripples are over everything while in full screen it happens mainly when I am looking at the skybox and rotating the camera up and down rather quickly. I see the occasional line or distortion across the screen. While looking at the terrain or anything else it is fine.