This appears to be a driver bug and will need to go upstream (though I
dunno if it is worth it). However, there appears to be a quick fix by
modifying the x server config file (see:
http://ubuntuforums.org/showthread.php?t=188271)

** Changed in: Ubuntu
Sourcepackagename: None => nvidia-kernel-common
       Status: Unconfirmed => Confirmed

-- 
flashing mouse cusor during wait state
https://launchpad.net/bugs/49312

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