This is a 100% repeatable condition.
New, out-of-box unit configured only for 'manual' day/night or 'always daytime' mode, no other configuration from factory settings.
Place unit about 2-4 inches from a typical window screen with daytime lighting beyond the screen. (This would be a common Use Case of having unit on window sill viewing outside of house that has windows with screens in them)
The unit will start a 10 second cycle of
1. unit IR clicks into place and unit freezes (no live video)
2. after 5 seconds, IR clicks back off, last few frames of IR video sent and unit resets to day mode
3. 5 seconds of live daytime video
repeat 1-3 ad infinitum
Has been tested with two units (original unit flashed with 1.03 code, as well as RMA new unit that had 1.03 preloaded)
I see this as either a software bug or perhaps a QA test condition (point unit at test chart which will cause software to cycle IR to validate day/night mode works). If it is the latter, then this test duplicates a valid Use Case and test case conditions need to change.
26 Aug 2014: update -- make sure when recreating the condition that the room is darker (no reflection of indoor light onto the window)