The gnome-terminal was partially obscured. An application moves
cursor under an overlapping window, on its own accord.
Clicking to focus causes the shadow cursor to reappear in the
cursor position which was remembered before.
See the attached screenshot.
Created attachment 96010 [details]
Pete is this still an issue in RHEL4 or FC4?
No, it appears resolved in FC3 (vte 0.11.11-6).