The way I understand many 3d tv's to work is that they receive video from a source at twice the actual framerate, toggling between the left and right images, then your tv takes the left and right images, and sends each angle to its appropriate eye, by quickly switching between left and right eyes in sync with the tv switching. This would be an active 3d display; actively switching from left to right.
A passive display shows both images layered together, then uses filters (vertical/horizantal polarization or red/blue for example) to isolate left from right.
more info here:
http://www.scec.org/geowall/actpass.html
There are two examples in the stereo lib, both an active 3d and a passive (anaglyph). the Active version sounds like what you are seeing, where it rapidly switches from left to right eye, creating a flashing effect (my menubar was even flashing with the sketch). the anaglyph has the red/blue edges.
Because your tv is a passive 3d, I would start with the anaglyph example, and look at the last line in the setup:
- stereo = new Stereo(this, eyeSep, 45f, .1f, 1000f, Stereo.StereoType.ANAGLYPH_CYANLEFT_REDRIGHT);
and try to change the StereoType parameter. It's possible that the library does not have a type to fit your particular graphics card, or you may need to set it up in a certain way to work correctly.
I would defiantly look into the graphics card settings like Jesse was saying to try to figure out how to send the left and right eyes to the card. It may be that you can send a double wide image, and it will handle the layering. You may want to look for the developer tools from nvidea to see if it has any helper apps or libraries for java you could use.
http://developer.nvidia.com/
Im sticking with the red/blue glasses 3d myself :) just got a pair of these for $.99:
http://www.ebay.com/itm/New-Red-Blue-3D-Anaglyph-Glasses-Movie-Game-Vision-/170755077375?pt=LH_DefaultDomain_0&hash=item27c1cbb4ff
good luck!