I truely believe I have FIXED the problem.

On my particular machine! I hope this can help others.
I use the wireless Intellimouse Explorer 2.0 with driver update 6.0 from Microsoft:
http://www.microsoft.com/hardware/mouseandkeyboard/DownloadResult.aspx?prod=m_wie20&os=XP_32&lang=en&driverVersion=IntelliPoint%206.1%2032-bit%20for%20Windows%20XP
In the Mouse Properties window, select "
Pointer Options" tab. This has nothing to do with Cursor XP. Increase pointer speed under "
Motion" to about three clicks under Fast. Check "Enhance pointer precision"
Under "
Snap To" check the box to automatically move pointer...
Under "
Visibility" chaeck all three choices including pointer trails, but slide the option all the way to "short"
Apply and Exit
Any option can be used under Cursor XP, now.
I have navigated numerous web pages to check to see if the cursor disappears and it doesn't. No blinking, no nothin' but cursor! The default settings for the mouse just isn't enough when using IE7, I guess. And I didn't lose any hair!