The reality of working with sharepoint is that you need to use a virtual pc running win2003/2008.
My preference has always been for VMWare, and VMWare 6.0 really wipes the floor with MS Virtual PC.
Unfortunately sometimes I am forced to work with VPC, and one of the things that really bugged me was a jerky cursor... searching google didn't help much so I figured it would be something to do with the graphics (after changing a reg setting to increase resolution of the mouse and noticing other jerkiness), and sure enough I eventually found it.
Fix: On a VPC with Win2003 go to Display Properties > Settings > Advanced > Troubleshoot slide the hardware acceleration all the way to Full.