I can confirm this is happening again. The only app I can think which would be doing that is flash - I had at least one page with flash open every time in firefox when it happened (and it happened a good dozen of times), and I see other reporters using opera/epiphany at the time it happens.
Switching tty does not fix it.
Switching desktop does not fix it.
Restarting X seems to be the only way to fix it, although suggestions would be good on something less "annoying".
Keyboard input is still perfectly fine.
Mouse pointer still follows in X - the cursor is there and moving, sometimes changing when hovering a text area and so on. In an application replacing the cursor (tested with a few games under Wine), the cursor will be present where it died in the application and never move - the X cursor will be duplicate and not replaced when hovering the app.
Keyboard input works perfectly.
Dual monitor 1680x1050, nVidia 9800GTX+ proprietary 180.11 drivers. Xinerama enabled.
Xlib: extension "RANDR" missing on display ":0.0". also appears when starting GUI apps, although I don't think that's related.
A second usb mouse is connected, and behaves exactly like the first one.