I'm running VLC 1.1.4. Nvidia graphics and Win7-64bit. Same issue with the mouse pointer not hiding. Since I didn't have Task Manager open, that solution didn't help - but uTorrent was open - I closed it (minimized it to the Task Tray) and my mouse pointer was hidden again!I can confirm that this is triggered by having TASK MANAGER opened at the same time as VLC is running. Closing Task Manager returns the mouse pointer hiding to its normal state. Try it yourselves, just close TM and the problem disappears.
This is a bug on VLC player and I really hope it can be fixed soon because the pre 1 versions did not have this issue. It is an annoying thing really.
Thanks for all the help.
Seems to be a problem with applications, which have an visible icon in the task tray - can anyone confirm this?