In short, I installed Fedora 8 as a guest in VMWare running on Windows XP. Everything was fine but the mouse movement was jerky. Not jerky like a video performance problem, but more like wiggly and jittery. It looked a little like my hand was shaking on the mouse, but I was calm as can be.
Reading through the logs, I realized that X had somehow detected my mouse twice. I guess it was getting conficting signals from each movement. I fixed it by opening
Most of the advice I could find on the topic of funky mouse movement in VMWare advises you to install VMWare tools. Don't bother - it won't work under Fedora 8 and you'll waste a lot of time trying. You don't need it anyway - Fedora 8 comes with working VMWare display and mouse drivers.