I am also experiencing this issue with a clean install of Intrepid. I am using 
the Nvidia 177 driver. I have found that after typing in the ip address if I 
hit tab a few times before connecting I do not have this issue. From what I can 
tell the box appears over the protocol selection field (however it appears to 
be offset from the actual field.)
I have not experienced full system freeze due to this, only loss of mouse 
within the remote desktop window, keyboard still works in the remote desktop.
I'm not sure if it matters but I leave the protocol set to the default of rdpv5.

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terminal server client disables mouse on desktop
https://bugs.launchpad.net/bugs/288868
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