Reverting to the previous version (x-x-i-s_0.15.0+git20080820-1ubuntu1)
cures the problem - behavior back to normal.

I booted in Recovery mode, selected root terminal, did apt-get remove
x-x-i-s and then dpkg -i with the previous version, which was in the
apt/archives.

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synaptics touchpad does not move mouse cursor
https://bugs.launchpad.net/bugs/263032
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