Here is some general information about the reference display settings that may help explain things a little better.   One of the main reasons we still have the XOR drawing mode is so that you can quickly tell if your walls are aligned between floors.  If your walls are aligned then you will see your wall lines drawn in some other color (typically blue with out of the box layer settings).  If your walls are not aligned then they will appear red (the out of box reference color).  
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