I have not gotten confirmation of what I believe to be a bug in SolidWorks 2012 (my VAR is being unresponsive today), but I'm pretty confident of this one and fortunately I seem to have stumbled on at least a temporary workaround ... possibly a permanent workaround per document affected.
When editing a sketch in an assembly, whether an assembly based sketch or a sketch in a component being edited in context, the text for dimensions becomes huge ... so large in fact that it can obscure the entire assembly view. Happens also with dimensions for mates in the assembly -- text become huge when editing the mate. I've confirmed this happens with three computers, one of which is running SW2012 SP1.0 and the other two running SP5.0. No similarities in these computers. The problem occurs on local hard drives and on server based assembly files. The problem can be corrected by the process below, but must be done for each assembly affected (and cannot be done from the machine running SP1.0). I have not found any System Properties or Document Properties which can be modified to ameliorate the problem, but I have found Document Properties which can be reset which does correct the problem.
From the Options dialog box and the Document Properties tab expand both Annotations and Dimensions. Click on each different type of Annotation and Dimension separately (e.g., Balloons, Angle, Datums, Chamfer, Linear, etc.) and you may see that the display example of the type of some or all of the annotation or dimension types is corrupted in some way. There may be a missing value or there may be a leader running off the display or there may be a black mark or something else odd. For whatever Standard is chosen (e.g., ANSI, ISO, DIN, etc.) change the value to something else (for example from ISO to ANSI) then back again to the original value. The example display should correct itself. After going through all of the Annotations and Dimensions settings click OK then save the document. The problem should have disappeared.
Mark "Sporky" Stapleton
Watermark Design, LLC