I've read this paragraph in (info "(emacs) Display Custom"):
If the mouse pointer lies inside an Emacs frame, Emacs makes it
invisible each time you type a character to insert text, to prevent it
from obscuring the text. (To be precise, the hiding occurs when you
type a "self-inserting" character. *Note Inserting Text::.) Moving
the mouse pointer makes it visible again. To disable this feature, set
the variable `make-pointer-invisible' to `nil'.
When I try to test that feature, the mouse pointer never hides. It
only changes between the arrow (when the pointer is over an empty
area) and the "I-beam" (when the pointer is over some text).
I've tested this with Emacs -Q, with the current trunk, with the
current emacs-24 branch, and with the 24.2, 24.1 and 23.4 releases.
In all cases the behavior is the same (mouse pointer remains visible
after typing text).
In GNU Emacs 24.3.50.1 (i386-mingw-nt6.1.7601)
of 2012-11-18 on MS-W7-DANI