I am not sure if this is a new features for AutoCAD 2009 or 2010, but the solution is the same. When an xref is inserted in the drawing the colours appear faded. It looks like it is in a permanent "in-place edit block" mode but it is not.
I actually like this new feature because it allows for visual recognition of line work and a distinction between an xref and objects drawn.
To control the intensity of the fade or remove the fading use the following steps:
- In AutoCAD, open the OPTIONS dialogue box.
- Choose the DISPLAY tab.
- Located at the bottom-right of the dialogue box, there is a section called "Fade Control".
- Adjust the slide bar labeled "Xref display" to control the intensity of the Xref fade.