airlied wasn't sure if it's a driver or a server bug, so feel free to reassign.

When booting with nomodeset, the xf86ScreenLayouts get set up with width 1024 and an offset of 2048 (and -2048 for the second one). This leads to a stuck cursor on the right display as xf86CursorOffScreen enters a weird loop.

given x < 0, the first condition would reset the screen to screen 0 but add the edge offset (2048) to the x coordinate. The second condition would then notice that x > screen->width (2048 - x is greater than 1024) resetting the cursor to the second screen. result is a stuck cursor on the right screen.

in the second server generation however xf86ScreenLayouts is configured with the right value and everything is nice and dandy.

reproducible:
boot with nomodeset. xinerama setup, move cursor to second screen - it gets stuck.
reset server by running any client that disconnects again (xdpyinfo is handy), then notice how the cursor can now move between the screens.

server 1.7.5
xf86-video-ati on 1b7e9a2e5 (radeon: fixes for zaphodheads option)