This is expected behaviour in xorg and not only since Karmic.  What do
you expect the cursor to do when moving in and out of that area not
covered by either of the monitors?  One camp of users wants it to move
around freely while the other camp wants the cursor to strictly stay
within the visible screens.  I'm from the second camp, you seem to be
from the first.  I think this may even be configurable.  I looked around
quite a bit (I was sure to have a bug report to the opposite effect some
time ago), yet found nothing.

I think this report should be closed with status invalid.

-- 
Cursor can move off-screen when dual-monitors do not form rectangular area
https://bugs.launchpad.net/bugs/389519
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