This is actually fixed in kernel 3.3-rc1. The commit diff to 3.2 is 115
commits, anyone willing to bisect the diff?

** Changed in: xserver-xorg-video-nouveau (Ubuntu)
   Importance: Undecided => Medium

** Changed in: xserver-xorg-video-nouveau (Ubuntu)
       Status: Confirmed => Triaged

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https://bugs.launchpad.net/bugs/926714

Title:
  continuous jerky mouse movements while using nouveau driver in 12.04

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