Early in a game last night (after upgrading to 1.06 and then getting the hotfix or update for 1.06), I had no units other than my Sovereign and a couple other champions I had recruited.  I had four cities at the time and my sovereign was in one of them.  I learned the summon familiar spell, so I had my sovereign step out of the city and cast Summon Familiar.  I then cast Enchant Armor or whatever the spell is that gives you +2 armor.  The spell apparently didn't get applied to either my sovereign or the familiar.  I then moved the hero back into the city.  After that, my sovereign was bugged and appeared in both that city and in another city (not even my starting city).  There also were issues with stacking as my hero and units in his space would not move together.  Somehow this issue cleared itself up after a few turns.  It may have been after I had a combat.  But it was causing all sorts of weird UI issues for a short bit.