If you found this thread, there's a good thread on this
here (look around June 2011 to May 2014, about 10-15 posts on what users have found). I've updated it for what I found running v2.1.3 on a fast CPU with Windows 7 and Windows 8.1.
Nutshell version - try playing round with these two settings:
"Show video title for x milliseconds" and
"Hide cursor and full screen controller after x milliseconds" (both under "Video"). Those were enough for me and seem to be enough for some other people, but
you have to test them quite delicately and quit/restart VLC between tests as the values may only work in a limited "window". (Some people also report that Task Manager or other programs can break cursor hiding too - I didn't have that issue though).