I have a MacBook Air connected via MiniDisplayPort-->HDMI to a TV and I'm using the TV as an extended desktop. Every few SECONDS, if I move the mouse, the displays freeze and show the standard blue backdrop that appears when you first connect an external display and the system is detecting and adjusting.

So it's literally:

Plug in cable.
Display detected; blue background
Both displays active
Move mouse half an inch
Display detected; blue background
Both displays active
Move mouse another half inch
Display detected; blue background
Both displays active
Try to type something
Display detected; blue background
Both displays active
etc. ad nauseum

If I don't move the mouse there is no problem (I can watch a video on the TV, for example, with no issues unless I bump the trackpad by mistake). And if I disconnect the cable, my problems go away (I'm typing this now with no issues).

This has never happened before with this exact computer, cable, and TV. It worked fine two days ago and every single time before that. I've changed nothing on my computer in the past week (barely used it and the one time I did it was to connect it to the TV and it worked with no problems).

Anyone with an OSX machine ever have this problem? What could be causing it? Google yields no results.

I have no experience with this sort of thing but 3 ideas:

-Maybe some setting changed in your TV, or your TV is starting to die a slow death. Is there another TV or external monitor you can test with?
-Could it be your cable is the culprit (cant really explain why this only happens during a mouse movement), although if it was pinched or shorting that would explain why it constantly reconnects.
-I have no idea how OSX updates, could it do a driver update without you knowing about it?