Perfect guys, thanks so much. It's so so helpful that you've both posted this as I can see that the common characteristic is your hardware. Looks like this might be an o3DS issue, which makes me think it's almost definitely memory related. This would explain the additional glitching you're both seeing when launching homebrew. Or maybe the o3DS CPU doesn't multitask in the same way as n3DS. Either way, your help has been invaluable. For now there will be the option to disable background title launching. If I can get my hands on an o3DS then I might be able to actually fix the problem. Or when the source is up, an o3DS-owning dev might be able to take a look.
Thanks again buds!!!