Cause
Liquid crystals have a natural relaxed state. When a voltage is applied they rearrange themselves to block certain light waves. If left with the same voltage for an extended period of time (e.g. displaying a pointer or the Microsoft Windows Taskbar in one place), the liquid crystals can develop a tendency to stay in one position. This ever so slight tendency to stay arranged in one position can throw the requested color off by a slight degree, which causes the image to look like the traditional "burn-in" on phosphor based displays. In fact, the root cause of LCD image persistence is the same as phosphor burn-in, namely, non-uniform usage of the display's pixels.
The cause of this tendency is unclear. It might be due to accumulation of ionic impurities inside the LCD, electric charge building up near the electrodes, parasitic capacitance, or "a DC voltage component that occurs unavoidably in some display pixels owing to anisotropy in the dielectric constant of the liquid crystal".
Usually the image persistence is temporary, but can become permanent. As a result, all major LCD display manufacturers exclude image persistence from their warranties.
Read more about this topic: Image Persistence