The fault definetly lies with both the DM and some Players. It may not even be intentional, but it's there.
Best thing is to talk to each of them, show them what they did wrong, how it defeats the purpose of the game, how this game is not about winning against the others, and how it upsets people. If the situation is not resolved, I think the only reasonable thing is to leave the group. Otherwise it's going to wind up the players done wrong, and suddenly, the game that was meant to relieve them of stress is creating more. Star Chef's recipe for disaster, that one!
The rogue has to learn that you don't steal from anyone - and again I point out that it's rogue, not thief! They don't have to be pick pockets - and that even thieves will come to appreciate some people. Unless, of course, theirs is an evil alignment and others are just tools for them.
But even then I'm always flat out against infighting in the party. Saw it a couple of times, always hated it.
About spotting the whole thing: First, as everyone said, spot and listen are reflexive. You shouldn't have to ask for rolls. If there's something to be seen, you're entitled to these rolls.
Also, even if noone notices in character, it's obvious out of character, and is bound to upset people. It makes it seems that one player plays to win. Cannot work, and will end in tears.
The spotlight hog must see that the others aren't extras. They spend their free time (which they probably don't have too much of) playing D&D, and they want to spend it actually playing. If they want to listen to a story played by others, they can go to the theater or watch TV. Chances are that the talent shown in those stories is a lot better than that your average roleplayer can come up with. If they just sit there, unable to do anything, they're bound to be upset. Another situation that cannot be good!
I had some similar situations, and heard of another instance that sounds a lot like this one (though even worse):
There was this all-evil game. The DM was a nice guy, but lacking in force of personality to keep his characters in check. This was shamelessly abused by one player (who was of the "I play to win" type in other games, too). He played a twinked out minotaur fighter (this was back in AD&D). Whenever there was treasure, he just took it, "justifying" it by "staying in character - my minotaur is greedy!". The problem was that no other player could stand up to that thing. They didn't seem to get anything together to gang up on him, and the DM wasn't in charge enough to put a stop on it. The result was that the campaign was dropped because it became unplayable.
Another player - not the most experienced - also had problems, or rather, was the problem: He couldn't keep in character and out of character separated, couldn't take jokes (which was at one point made worse by the fact that he played a comely female character in an evil group), and also had a bit of "play to win" syndrome.
There were several incidents:
Said anti-paladin (the hot chick) was, of course, target of several out of character jokes. It was a matter of course to make comments about female characters played by guys. Like "my char walks in the back and stares at her a.." and all the innuendo you can think of as a male in your prime around a gaming table with beer involved (i.e. a lot)
At one point, his character reacted to one of my (not my character's) comments and attacked him out of the blue. I survived, the DM let it slide (that DM was serious crap, though, so no surprise there). I left the campaign (due to the poor attendance record) before my character could exact his revenge.
The same guy, other DM, other game, other edition (not that the last part mattered). Played a sorcerer in a party that also had a wizard. So over the hill comes half a dozen draconians. The wizards chucks a fireball, the sorcerer tosses another right after, the draconians are toast. The DM tells them that they each get x amount XP, when I interject:
"Shouldn't the whole party get XP? Sure, we didn't get to act, but it's not as if we aren't there. We're still guarding those two, healing those two, and so on, and we would have participated had it been a harder battle. Otherwise I would have insisted on initiative (I would probably have won, I had +10 or something, it was a Ninja from Rokugan), and dropped at least one myself before they started to fire away."
The DM thought this was reasonable. The other players thought this was reasonable. The wizard's player thought this was reasonable.
The sorcerer's player threw a hissy fit. But it was already settled. Then, out of the clear blue sky, his character started to slander my character behind his back, like whispering to our cleric "that one's a coward, always sneaking around". When I told the DM that I rolled a (pretty high numger) on my listen check, the guy hissed: "You can't just roll dice, the DM has to say!" The DM relented (probably to keep the peace), but I swore to gut that one the first reason he gave me. I had my two old ninja-to covered in wyvern blood and his name on the blades. The guy left the group (just no longer showing up) before I could kill his character."
I also had him as a player when I ran CotSQ, and, having seen first hand how some people play all-evil, I told them clearly, in game and out of game, that they were to work together, or else.
Of course, the guy tried to keep some loot to himself. Of course, other players were entitled to spot checks, he was found out, and got the one and only warning - again, both in game and out of game.
Well, this has turned into a rant I see, so I'll stop here. I'll just repeat that this game is meant to play with each other, not against each other.
