The solution for the CTM problem (which is what causes the wacky cursor
jumping) is this patch, which was accepted into upstream on 19 Nov 2012;
it is not yet in quantal-proposed, but I was able to rebuild xorg-
server-1.13.0 (from 12.10) with this patch and the problem went away:

http://www.mail-archive.com/xorg-devel@lists.x.org/msg33742.html

There is another version of the patch floating around somewhere if you
want to fix 12.04.

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https://bugs.launchpad.net/bugs/1005321

Title:
  Several pointing device related problems occur when a touchscreen is
  installed

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