This happens to me when I change to the number keyboard on the Apple ID prompt. If I change to the letter keyboard and password back to the number keyboard it goes away. I took a video with my bfs iPhone of the flashing lines on the keys but it shows my log in..,
dont worry too much about it - everyone is getting it. Most likely a software issue.
My dad updated his iPhone 4s to iOS6 this morning - I'll have a play around and see if it happens on that one too.
I think its software. Hope nxt ios fix it soonI've experienced it on both the 4s n the 5. Def a software glitch