Upgrade to the latest xserver-xorg-core:

xorg-server (2:1.6.0-0ubuntu11) jaunty; urgency=low

  * Add 175_set_pointer_screen_in_xtestfakeinput.patch: Fixes issue when
    using Vino, mouse cursor can get stuck in the upper left corner of the
    screen.  The POINTER_SCREEN flag must be set explicitly for XTest core 
events to avoid
    out-of-range events when the lastSlave was an SD with an explicit axis 
range.
    Device events sent through XTest don't need this flag, they are expected to 
be
    in the valuator range of the device anyway.
    (LP: #337926)

and report back.

Note that the default mouse driver since 8.10  is -evdev, not -mouse.
This bug doesn't seem to be in either of those though..

** Changed in: xserver-xorg-input-mouse (Ubuntu)
       Status: Confirmed => Incomplete

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cursor with synergyc client is stuck in upper left corner
https://bugs.launchpad.net/bugs/321444
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