Typically, perceptual stabilization mechanisms make us unaware of the retinal image motion produced by the small, involuntary eye movements our eyes constantly make during fixation. The breakdown of perceptual stability is demonstrated by the on-line jitter illusion, in which a circular static pattern appears to jitter coherently when surrounded by a flickering annular pattern. Although both regions of the stimulus are subject to retinal motion from eye movements, the visual system attributes this motion to the central static region in the form of visual jitter, while the surrounding flickering region remains perceptually stable. We investigated factors influencing this allocation of motion and reference frame in the on-line jitter illusion. The flickering of the surround was found to impair the detection of simultaneous random-walk motion in this area, giving a detection reliability of around 80% for motion approximating that from fixational eye movements. Changes to spatial texture and location of flicker (centre vs. surrounding annulus) had little effect on the final percept. However, use of a nonconcentric stimulus resulted in a marked reduction in apparent jitter in all subjects. Our results suggest for the on-line jitter illusion, allocation of motion and reference frame is influenced by the general principle that, if one region surrounds another, the surrounding region tends to be allocated as the frame of reference. When this factor is controlled for, spatial textures, location of flicker, and the masking of motion by flicker have a smaller but measurable influence on the final percept.