This issue is present on 12.04.
Has the fix been applied to Precise's Xorg package?
(I can't find it in 
http://changelogs.ubuntu.com/changelogs/pool/main/x/xorg/xorg_7.6+12ubuntu1/changelog)

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https://bugs.launchpad.net/bugs/774938

Title:
  Erratic cursor movement when using "Coordinate Transformation Matrix"

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