I have this too on all versions of Emacs. 
It is fixed by loading with -nw (no window interface), however -q still suffers 
(load without custom init i.e. color-themes etc). 

lspci...

00:02.0 VGA compatible controller: Intel Corporation Mobile GM965/GL960 
Integrated Graphics Controller (primary) (rev 03)
00:02.1 Display controller: Intel Corporation Mobile GM965/GL960 Integrated 
Graphics Controller (secondary) (rev 03)

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https://bugs.launchpad.net/bugs/712024

Title:
  emacs23 problems displaying cursor

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