I have an Dell Inspiron 1521 Laptop that I upgraded from Vista to Windows 7. Since October after a Windows update, the "infamous" jumping cursor began. I have unloaded all of my software, run virus scans in the safe mode, reformat in place the hard drive, did a complete reformatting of the hard drive, reloaded Windows 7, more virus scans, etc. etc. etc. but all provided no relief.
I read on another site about disabling the touchpad and using a wireless mouse to get rid of the jumping cursor. I attempted it. However, I couldn't disable the touchpad as the disable button was greyed out. I searched for several days for a remedy to be able to uninstall/disable my touchpad with no luck. However, on a Dell forum, one Dell user suggested downloading a Synaptics touchpad/mouse driver http://www.synaptics.com/resources/drivers to be able to disable the touchpad. I did this.
Great news, the new driver fixed my jumping cursor!!!!
It has been three days now without a jumping cursor - what a relief. Hope this works for you!