As I said before its not just vmmouse if I use virt-viewer to connect to
a vm that doesn't even have xorg installed and do a "ls -R /" I get 100%
CPU usage and the text scrolls at a snails pace. However if I ssh into
the vm and issue the same command it uses almost no CPU and scrolls very
fast like it would if I issued it from a terminal on the host.

-- 
[lucid kvm-qemu]High cpu usage when moving mouse
https://bugs.launchpad.net/bugs/553081
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which is subscribed to xserver-xorg-input-vmmouse in ubuntu.

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