A file such as a DXF or Shapefile looks different as a background layer, compared to how it looks in AutoCAD, MicroStation or ArcGIS.
Or... when zooming in to, or panning around a background layer, it appears to shift around.
Reference # 659289
The issue with the background not appearing the same or shifting around is a known issue related to the use of very large coordinates. When the X/Y coordinates of the linework or image is very large, the accuracy is reduced, and curves and other things will not appear smooth, but rather they will appear jagged. This problem is more likely to occur when non US unit (i.e., feet) map units are in use.
For polyline, point and polygon Shapefiles, an improvement was made in a patch to version 10.00.00.55 of WaterCAD, WaterGEMS and HAMMER, and a patch for version 10.01.00.70 of SewerGEMS, SewerCAD, StormCAD and CivilStorm. Please contact technical support for the patch if the above is the software version that you are using, or, upgrade to a newer version.
Note: Whilst shapefile backgrounds should work with all the newer versions of the Hydraulics and Hydrology applications (newer than 10.00.xx.xx), there is potentially still an issue that can occur with DXF background layers when very large coordinates and non feet map units are in use. Please see the "Workarounds" section for a potential way to work around this limitation for DXF files.
If you are not able to upgrade or patch, or if you're using a different background layer type:
1) Try running the Update Database Cache command, from File > Database Utilities (CONNECT Edition) or Tools > Database Utilities (V8i).
2) Take advantage of another platform. That is, if the issue is with a DXF or DGN, use the MicroStation or AutoCAD integrated platform of the product. If the issue is with an image, use the ArcMap integrated version. You should see a shortcut for an integrated version of the product, such as StormCAD for MicroStation.
3) For the case of DXF files, particularly line/poly-line DXF files that jump around when zoomed into, a recommended work around is to convert the DXF file to a Shapefile and use the Shapefile as a background layer instead. This will work best for DXF files that do not contain text or other non line/poly-line objects. The conversion can be done with a number of different tools, including the free to download and use GIS software called QGIS. In QGIS, create a new project, choose Layer --> Add Layer --> Add Vector Layer.... In the dialog choose Source Type file. In the field called Vector Dataset(s) choose the DXF file that you want to add. Click Add then Close. In the Layers window, right-click on the new layer, choose Export --> Save Features As.... Ensure the Format is set to ESRI Shapefile. Provide a file name for the shapefile (including picking a folder else the output will be directed to the QGIS bin folder). Click OK. Close QGIS and discard the project. You will now have a shapefile that you can add as a background layer in lieu of the original DXF file.
4) For a DXF file see some additional troubleshooting steps which can be performed on a CAD platform such as MicroStation / AutoCAD;
When importing a DXF or shapefile as a background, it does not show up in the model, even when pressing zoom extents.