http://youtube.com/watch?v=ugrBNNHJfAA
if you watch that video you'd see what i mean.
just look at the cursor carefully.

From what I see, the cursor looks OK.
The cursor that looks like a hand is caused when you hover over a link
The cursor that looks like a line happens when you hit the edge of an onscreen box (usually text)

No actually that hardly happens.
If you look at the hand when it hovers to the edge you see a big pointer. [in gold]

It doesn't happen like that no more.
Right now it just happens in paint noww and some other sites.

I think that I see it, but can't be of much help (I've got bad eyes).

FWIW - we had a cursor problem for several years due to using the Microsoft Files and Settings transfer wizard to move my wife's XP Home stuff to XP Pro. Never could fix it, even with a repair install. We finally retired that computer when Vista came out - with the problem still occurring. Last week I resurrected the system for use at my wife's office (and it still had the problem) - so I formatted and reinstalled XP, which finally got rid of the problem.

Yes they told me to do a system recovery.