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Oops, sorry about the question regarding the whole movie or full motion clip. I see in your subject line that you are specifically talking about Full Motion.
Sorry again, but which version of Captivate are you using?
I am using "the old" Captivate 1.01.1447, but the error also occured with the trial version of the actual version.
Regarding the question about if there is any cursor at all: yes there is. I am successfully producing a lot of advertising movies of my applications, the only problem are big cursors. As soon as I exceed a certain cursor size (about 30px), the cursors are not reproduced correctly anymore.
ps: for details see also my posting on codeguru: http://www.codeguru.com/forum/showthread.php?p=1618989#post1618989