Forwarding this bug from Ubuntu reporter Jonathan Voss:
http://bugs.launchpad.net/ubuntu/+source/xserver-xorg-video-ati/+bug/929960

[Problem]
Mouse cursor corruption when switching users with an older ATI card

[Original Description]
I'm guessing the box is 64x64 pixels. It's got horizontal lines across it. The mouse pointer looks completely normal in screenshots, so I am including a picture taken with my phone.

It looked messed up in the same way on the other account, and continues to look messed up now that I have switched back. It still functions normally, but it's a little hard to know where you're clicking since the actual pointer seems to be a bit away from the upper left corner of this box.

I've just reproduced it twice tonight. It seems to happen randomly when switching to other accounts or to the login screen. I can't get it to happen consistently however so it's hard to tell what's causing it. Since my last reboot, I've switched through a bunch of accounts, gnome3, unity, and unity 2d, without getting the mouse corruption.

By the way, I use a program called redshift, which causes a reddish hue at night, as can be seen in the picture. Redshift does not appear to affect the mouse pointer though. It may also cause this bug I guess.

DistroRelease: Ubuntu 12.04
Package: xorg 1:7.6+10ubuntu1
ProcVersionSignature: Ubuntu 3.2.0-14.23-generic 3.2.3
Uname: Linux 3.2.0-14-generic i686
.tmp.unity.support.test.0:
 
ApportVersion: 1.91-0ubuntu1
Architecture: i386
CompizPlugins: [core,bailer,detection,composite,opengl,decor,mousepoll,move,compiztoolbox,snap,regex,place,imgpng,vpswitch,grid,gnomecompat,resize,animation,wall,unitymtgrabhandles,session,expo,fade,workarounds,ezoom,scale,unityshell]
CompositorRunning: None
Date: Thu Feb  9 21:35:01 2012
DistUpgraded: Log time: 2012-01-29 13:29:25.075442
DistroCodename: precise
DistroVariant: ubuntu
ExtraDebuggingInterest: Yes, whatever it takes to get this fixed in Ubuntu
GraphicsCard:
 Advanced Micro Devices [AMD] nee ATI R423 UK [Radeon X800SE (PCIE)] [1002:554b] (prog-if 00 [VGA controller])
   Subsystem: C.P. Technology Co. Ltd Device [148c:2154]
   Subsystem: C.P. Technology Co. Ltd Device [148c:2155]
InstallationMedia: Ubuntu 10.04.1 LTS "Lucid Lynx" - Release i386 (20100816.1)
Lsusb:
 Bus 001 Device 001: ID 1d6b:0002 Linux Foundation 2.0 root hub
 Bus 002 Device 001: ID 1d6b:0001 Linux Foundation 1.1 root hub
 Bus 001 Device 003: ID 0bc2:0503 Seagate RSS LLC 
 Bus 002 Device 002: ID 046d:c52b Logitech, Inc. Unifying Receiver
MachineType: System manufacturer System Product Name
ProcKernelCmdLine: BOOT_IMAGE=/boot/vmlinuz-3.2.0-14-generic root=UUID=9735bb88-e60b-48fc-8db3-4153611e79a3 ro quiet splash vt.handoff=7
SourcePackage: xorg
Symptom: display
UpgradeStatus: Upgraded to precise on 2012-02-08 (1 days ago)
dmi.bios.date: 11/08/2005
dmi.bios.vendor: Phoenix Technologies, LTD
dmi.bios.version: ASUS A8N5X ACPI BIOS Revision 0502
dmi.board.name: A8N5X
dmi.board.vendor: ASUSTeK Computer INC.
dmi.board.version: 1.XX
dmi.chassis.asset.tag: 123456789000
dmi.chassis.type: 3
dmi.chassis.vendor: Chassis Manufacture
dmi.chassis.version: Chassis Version
dmi.modalias: dmi:bvnPhoenixTechnologies,LTD:bvrASUSA8N5XACPIBIOSRevision0502:bd11/08/2005:svnSystemmanufacturer:pnSystemProductName:pvrSystemVersion:rvnASUSTeKComputerINC.:rnA8N5X:rvr1.XX:cvnChassisManufacture:ct3:cvrChassisVersion:
dmi.product.name: System Product Name
dmi.product.version: System Version
dmi.sys.vendor: System manufacturer
version.compiz: compiz 1:0.9.6+bzr20110929-0ubuntu8
version.libdrm2: libdrm2 2.4.30-1ubuntu1
version.libgl1-mesa-dri: libgl1-mesa-dri 8.0~rc2-0ubuntu4
version.libgl1-mesa-dri-experimental: libgl1-mesa-dri-experimental N/A
version.libgl1-mesa-glx: libgl1-mesa-glx 8.0~rc2-0ubuntu4
version.xserver-xorg-core: xserver-xorg-core 2:1.11.3-0ubuntu10
version.xserver-xorg-input-evdev: xserver-xorg-input-evdev 1:2.6.99.901-1ubuntu3
version.xserver-xorg-video-ati: xserver-xorg-video-ati 1:6.14.99~git20111219.aacbd629-0ubuntu2
version.xserver-xorg-video-intel: xserver-xorg-video-intel 2:2.17.0-1ubuntu3
version.xserver-xorg-video-nouveau: xserver-xorg-video-nouveau 1:0.0.16+git20111201+b5534a1-1build2