Had this problem with Mobility Radeon HD 3650

[See http://ubuntuforums.org/showthread.php?t=1470815&highlight=radeonhd
]

Latest kernel upgrade eliminates the invisible cursor issue for me.

  2.6.32-22-generic #35-Ubuntu SMP Tue Jun 1 14:18:25 UTC 2010 x86_64
GNU/Linux

-- 
Mouse cursor disappears after restarting screen (xrandr / resume)
https://bugs.launchpad.net/bugs/492782
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