I have the same problem. Using HWCursor, the cursor on the external monitor is a 65x65 square. This problem was not present in Dapper, but now exists for Edgy. I believe this is a bug in linux-restricted-modules-2.6.17, from the upstream ati bug found here: http://ati.cchtml.com/show_bug.cgi?id=508
This forum thread confirms that users of laptops with ATI cards are now experiencing dual monitor problems that did not exist in Dapper. http://ubuntuforums.org/showthread.php?t=270979&highlight=dapper -- with dual screen, mouse only on first screen https://launchpad.net/bugs/66365 -- ubuntu-bugs mailing list ubuntu-bugs@lists.ubuntu.com https://lists.ubuntu.com/mailman/listinfo/ubuntu-bugs