> A pseudo-mouse driver for the guest OS would position the guest mouse 
> pointer at the position of the host mouse pointer within the VNC 
> window, instead of using relative mouse movements and pretending to be 
> a real mouse to the guest OS.

Some pointing devices actually report absolute position as part of their 
packet stream.  Some examples:

 - Synaptics Touchpad
 - Various PS/2 touchscreen input drivers
 - Any USB HID-compliant device can

The first two require a "knocking" protocol to unlock the absolute 
positioning data.  Only the third has built-in support in Windows. 

Matt.