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I used to have the same problem back when I used Win98. Unfortunately I don't remember how I git rid of the problem. First thing I would look for is whether or not you're using "Comet Cursor" or some other third party cursor utility, and remove it. (Comet cursor is a Spyware trap anyway). Right off the top of my head that's all I can think of.
What type of video card are you using?
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