As Peter said, this issue is maddening. Finally fed up with this problem, I downgraded xorg to the version in hardy. Everything is now working well, with no more problems with mouse events.
I wonder if it really is a libxinerama (as in the libxinerama1 package) issue or not because I did not downgrade libxinerama, just xorg stuff and everything now works.
As Peter said, this issue is maddening. Finally fed up with this problem, I downgraded xorg to the version in hardy. Everything is now working well, with no more problems with mouse events.
I wonder if it really is a libxinerama (as in the libxinerama1 package) issue or not because I did not downgrade libxinerama, just xorg stuff and everything now works.