I'm using vmware 8, centOS host, win7 guest. I use dual monitors and everything else is working fine. I just shut the VM down to add the "usb.generic.allowHID = "TRUE"" setting to the .vmx file, and booted it back up again. Now, when I connect my mouse directly to the VM, the cursor disappears on the second screen. It is still active, as I can hover over things and see the effect, but I just can't see the mouse cursor.
If I disconnect the mouse from the guest, I can see the mouse across both screens like normal, but the navigation buttons cease working again.