There's an existing, broadly used method for solving the line transition errors - you background color every two lines in an alternating set of colors. There used to be ribbon-feed printer paper pre-colored with this for certain applications that involve reading across lines a lot (like database output.) Seems like that is a more practical solution.

Here's what I mean: http://www.stationerytrade.com/upfile/images/big/20122221112...

What about using eye tracking? A device could just detect you're at the end of a line, and put a small marker at the start of the next line.

I'm not aware of eye tracking setups that are reasonably priced and that accurate, but I like the idea quite a bit :) I'll have to test it out some time - should be relatively fake-able by just moving a marker up/down with keys.

I thought it was every three lines, but yeah.

I think you're right. It's been a few years since I saw one of these in person.

Here is a quick hack that does line-by-line background colours (excuse any crappy code; I'm not a web developer). http://jsbin.com/avuku/166/edit