using any actionscript that adds a displayobject to the display list (including setting its index) has always caused that behavior. that's expected.
to remove that object use removeChild() or removeChildAt().
to disable cursor changes over a textfield, assign the mouseChildren property of the textfield's parent to false.
You were bang on about the setChildIndex, thanks. I had never experienced this in flash CS4, but when I tested it, you are correct.
For the textfield, though, I still have a problem. The parent object is set to 'mouseEnabled=false' and 'mouseChildren=false', and the object itself has its properties set not to allow selection, but I'm still getting the text cursor when I mouse over it. I can't actually select the text, just click on it and recieve the small black highlight on the side of the field. When I convert back to CS4, I can't click on the text field at all, but when I convert back to CS5 and click on the text field, I get a small black highlight to side of the text, almost like a highlighted blank space or something similar, but the text field is the only object there. This behavior stop when I save as CS4, but returns when I convert to CS5. Any ideas? Thanks for your time.
are you using a tlf textfield or classic textfield? if class, is that an input textfield?