Update: This is now resolved (for me). The jumping cursor behaviour I was seeing was either a problem with my installation of Version 7.8.11 org-20120611 or a bug in that version.
Reverting to the built-in version (Version 6.33x) (by turning off the Emacs package manager) fixed the problem, and so did updating to Version 7.8.11 org-20120618 (from ELPA using the package manager).
