I had the same problem in XP. I was able to fix it be resetting the VerticalAlignment property in the Object Inspector. The value for this property was not correctly stored in (or read from) the DFM.
procedure TNxPopupEdit.WMSetFocus(var Message: TWMSetFocus); begin inherited; end;
with:
CODE
procedure TNxPopupEdit.WMSetFocus(var Message: TWMSetFocus); begin inherited; if (FStyle = dsDropDownList) then DestroyCaret; // mhu: don't show the caret in selection lists Refresh; // mhu: make sure focusrect is shown end;