This has got to be the strangest bug I've ever seen. My Dock stopped working right - the first suggestions I got were to kill the Dock (allowing it to restart). No go - magnify wouldn't work, and it wouldn't always apoear to the mouse - I had to unhide it to get to apps.

This was frustrating, and then I saw this page:

Other topics on the issue put the blame on wireless mice and can be fixed by unplugging the USB sensor from your computer and plugging it back in-- it happened to me and the unplug and plug fix worked.

That's just weird. I'm happy it fixed the problem, but wow :)