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Some people have reported that PuTTY's default mouse pointer (the Windows I-beam) appears black-on-black, and is hence invisible. It usually consists entirely of inverted pixels, and hence should appear white on PuTTY's default black background.
There have been sporadic reports of this for years, but they have become more frequent recently (2007), particularly associated with Windows Vista (but also reported with rdesktop). Some possible causes:
In all cases, changing the Windows I-beam cursor to something chunkier (via Control Panel / Mouse / Pointers or similar) should give you something usable.
At least one user has found that updating Windows caused the problem to go away, suggesting that either Vista itself or a video driver had a relevant bug that got fixed.
I've seen this same problem personally on a GeForce2MX, and I investigated it carefully. I believe it is a bug in the GeForce2MX video driver. The I-beam cursor is supposed to invert whatever colour is underneath it, but it mistakenly inverts black to black. (My suspicion is that each RGB value x is mapped to 256-x instead of 255-x, or some equally easy typo.)
Perhaps complaining to the video card manufacturer (assuming it's them who wrote the driver) might be a good first step? I haven't heard of anyone else who's had this problem doing so...
What I did to solve this myself was to design my own replacement I-beam mouse pointer, which was white with a black outline so as to show up on any kind of background. The video driver was quite happy with that one.
If anybody else has this problem, they should try reconfiguring their PuTTY colour scheme so that black is RGB 1,1,1 instead of RGB 0,0,0. I suspect that that will make the problem go away; if so, that would confirm my theory about its cause.
Audit trail for this semi-bug.