I know that at least Gutboy and I have had this issue. After reporting it again last night, I got this response from Blizz
[blizzard]
Issue Reported: Previously reported mouse cursor disappearing issue, more info. Mouse cursor disappears when over "far away" terrain. All drivers are up to date, repair and reinstall did not fix the issue, addons make no difference installed or not. The video setting for Terrain Distance needed to be turned way down (less than half the bar) before cursor would stop disappearing. Please let developers know there's a bug in the graphics engine concerning terrain distance and mouse cursors disappearing.
Thank you for bringing this issue to our attention. We are aware of the issue, and are currently working on a solution. Please check the World of Warcraft website (http://www.worldofwarcraft.com/) for future updates and corrections. We appreciate your patience.
As another potential workaround. You may try enabling "Hardware Cursor" under the Video options. This setting can cause issues with certain systems, but if it does function for you without any additional side effects, it will prevent the cursor disappearance issue.
You can also check our forums (http://www.worldofwarcraft.com/forums/) where you can discuss game issues with other players.
Thank you again for contacting us. We hope you continue to enjoy your experience in World of Warcraft!
Sincerely,
Xanzent
Specialist Game Master
Blizzard Entertainment
www.blizzard.com
[/blizzard]
I am going to try enabling the hardware cursor and see if that also fixes the issue and lets me turn up the Terrain Distance again.