I can confirm this behavior as well. No problems at all with 8.10 fully
patched, but the upgrade caused the behavior described. I noticed that
my xorg was modified by the upgrade to comment out the mouse and
keyboard sections in favor of HAL.

$ lsb_release -rd
Description:    Ubuntu 9.04
Release:        9.04

$ apt-cache policy nvidia-180-modaliases
nvidia-180-modaliases:
  Installed: 180.44-0ubuntu1
  Candidate: 180.44-0ubuntu1
  Version table:
 *** 180.44-0ubuntu1 0
        500 http://us.archive.ubuntu.com jaunty/main Packages
        100 /var/lib/dpkg/status


$ dpkg --list | grep nvidia-180
ii  nvidia-180-kernel-source                   180.44-0ubuntu1                  
       NVIDIA binary kernel module source
ii  nvidia-180-libvdpau                        180.44-0ubuntu1                  
       Video Decode and Presentation API for Unix
ii  nvidia-180-modaliases                      180.44-0ubuntu1                  
       Modaliases for the NVIDIA binary X.Org drive



** Attachment added: "xorg.conf"
   http://launchpadlibrarian.net/25940512/xorg.conf

-- 
Ghost Mouse coursor images on multiple monitor setup
https://bugs.launchpad.net/bugs/358889
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