As of Fedora 9, the vmmouse driver no longer works as it is not selected by default with input hotplugging. Even with a manual InputSection added to xorg.conf, the driver will behave erratically because of conflict with evdev. The only workaround is to disable evdev by adding the "AutoAddDevices Off" option.
More information at
(see comment #31)
Fixed with 12.6.1.
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