I recently noticed that when I'm playing my shaman (elemental, but got healing spells on secondary bars) and I'm with another shaman (e.g. doing a dungeon) that is a healer, I can follow all his spell casts. The spells he uses get highlighted in my action bars, just as the spells I'm currently casting.

This gets rather annoying when I'm thinking "Oh my gosh, why am I casting Healing Wave?!?!?!?!" because Lightning Bolt and Healing Wave light up at the same time. Highly irritating!

Can you provide me with a screenshot of this? It doesn't actually sound like something that Dominos does.

I just reproduced this with only Domions loaded. You can find the screenshots here, once with me casting, once without.

http://www.abload.de/img/wowscrnshot_052711_10jm39.jpeg
http://www.abload.de/img/wowscrnshot_052711_10ikpb.jpeg

Final bit: What happens with the stock UI? (Sorry about my delay on the resposne)

I also noticed the same behavior on my paladin (retribution seeing holy spell casts).
Okay, so when I tries to reproduce this without any addons loaded, it still seems to happen, but only under certain conditions. If I'm not casting, I won't see other people's spells. If I am, however, casting, I can follow their every move. I wonder what went wrong on Blizzard's side there. Do you think you can filter out those "wrong" spell casts?

Possibly. The main problem here is that internally, I rely on Blizzard to do all of the display updating stuff for my buttons, so I cannot completely fix it on my end.

Done research on this, and I've yet to figure out why Dominos may be having issues that the Blizzard UI isn't.

Well, like I said it also happens in the Blizzard UI, though only under certain circumstances.