Comment 11 for bug 288502

I can confirm this issue in the 10.04 LTS Final! It happens when installing the Kubuntu Desktop Package on an existing vanilla Ubuntu. It seems to flip a few switches changing the default mouse theming on Ubuntu to the KDE Oxy One. (Personally I prefer the Ubuntu DMZ white so this was a issue for me)

The Gnome Theme Dialog can no longer change the Cursor at all! The Kde System Settings does change it but only till you log out.

The Fix!:
Just Run
sudo update-alternatives --config x-cursor-theme

... Then select a number 0-7 ( each number represents the cursor theme you want)
7 is the default Ubuntu DMZ white.

This should fix the issue. it did for me , Thanks to "varun" and others for the fix! :)
I Agree This should be rolled as the fix see "varuns" comment (above)
I suggest making the post install config run this as a script or something clever.