I see a number of things wrong in your approach at this.

1) All VCL interaction must be done from within the main thread

Your thread is directly accessing VCL controls. You cannot do this, as VCL is not thread-safe. You have to synchronize all your events back to the main thread, and let the main thread do this work.

2) All custom UI drawing (to the form) must be done from within the form's OnPaint event.

This explains why it works sometimes and not other times. The form is automatically painted, and if you don't use this event, your custom drawing will just be drawn over by the VCL.

3) All UI drawing must be done from within the main thread

This brings us back to points 1 and 2. VCL is not thread-safe. Your secondary thread should only be responsible for performing calculations, but not drawing the UI. After performing some calculation or doing some lengthy work, you must synchronize the results back to the main thread, and let that main thread do the drawing.

4) The thread should be entirely self-contained

You shouldn't put any code in this secondary thread which has any knowledge of how it will be displayed. In your case, you are explicitly referencing the form. Your thread should not even know if it's being used by a form. Your thread should only perform the lengthy calculation work, and have absolutely 0 consideration of the user interface. Synchronize events back to your main form when you need to instruct it to redraw.

Conclusion

You need to research thread safety. You will be able to answer most of your own questions by doing so. Make this thread strictly only to take care of the heavy work which would otherwise bog down the UI. Don't worry much about a slow UI, most modern computers are able to perform complex drawing in a small fraction of a second. That doesn't need to be in a separate thread.

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EDIT

After a few more years of experience, I've come to realize that #3 above is not necessarily true. In fact, in many cases, it's a great approach to perform detailed drawing from within a thread, but then the main thread would only be responsible for rendering that image to the user.

That, of course, is a whole topic of its own. You need to be able to safely paint the image which is managed in one thread to the other thread. This, also, requires use of Synchronize.