This is a fork from 2011's bug 39949 which describes more than one bug as filed and has been summarized.
In earlier servers, e.g. Fedora's 1.9.4, openSUSE's 1.10.4 & 1.9.3 and Mandriva's 1.10.3, the following minimal xorg.conf is sufficient to enable working panning:
Identifier "Default Device"
Identifier "Default Monitor"
DisplaySize 405 253 # 120 DPI @ 1920x1200 & virtual
Option "PreferredMode" "1440x900"
Option "Panning" "1920x1200"
Identifier "Default Screen"
Device "Default Device"
Monitor "Default Monitor"
Since sometime in 1.10.x, continuing even as of 1.16rc1, e.g. in Kubuntu's 1.11.3, when same xorg.conf is used, the mouse is constrained to the physical screen size, preventing visibly reaching the desktop portion that is below and to the right of the physical screen. This constraint is absent if instead e.g. for Intel 'xrandr --dpi 120 --fb 1920x1200 --output VGA1 --mode 1440x900 --panning 1920x1200' is used to produce the same screen configuration.
This was fixed in openSUSE 13.1, 13.2, 42.1 and Tumbleweed over a month ago. That bug's owner reportedly was denied access to submit a fix here, had last submitted xorg/xserver patch accepted at https://cgit.freedesktop.org/xorg/xserver/commit/?id=44d0fd435a4eaf45e252b4f00409152a6d599dfc .
We've never denied Egbert access to submit patches to X.Org, and since he's a
member of the X.Org Board of Directors, he would know how to appeal if we had.