I wondered about the bubbles too, but I've noticed bubbles in some polyps of what looks like some kind of cup coral. Also, I can't really say for sure that the bubbles are inside or on the surface. It does appear gelatinous, like you said knowse. I'm at a loss after going through the algae databases. knowse, how large has it gotten in your tank? I haven't really noticed a color shift yet, but this is my tank at work so it's not under constant observation. I wish I had a better camera, because as neat as it looks on the pic I posted, it's even better looking in person! Thanks everybody!