I've had this problem for many, many years on XP....   I haven't had it since I updated to 7..... it's a strange one.... happens to some people but not others... you get pretty good at lining it up blind after 7 yrs though.... 

If I unload Cursor FX and just use the Windows cursor everything is fine as soon as Cursor FX is loaded back the cursor then hides again.  This is particularly noticible when you right click on the Steam icon in the system tray, cursor disappears and you have to just go on what line is lighting up.  And I have no idea as to what is causing this other than something in cursor FX. I have noticed that when the cursor disappears if you move it the Cursor FX cursor flashes as it being moved.

That is quite poor answer.

Steam works with stock Windows cursor. You intend to replace it. Then no matter what Steam does - it is your problem. 

You could maintain public database and show that Steam  uses Windows API wrong way, like videocard makers try to fix bugs in 3D games codes.

Though even this, if Steam developers would ignore it, would not make the problem disappear. 

And you definitely can do would you managed to do back in 2000 with WindowBlinds - make a database of applications and settings per each which hooks to use and which functionality to suppress. I remember how i tweaked WB to work with Waterloo Maple and then pressed one button in WB GUI to upload the profile to the database for everyone's benefit. And WindowBlinds was the program much larger and much more delicate that CFX would every be.

I think you can have some gauges for advanced users and the database of problematic applications and their profiles. You manages to do it 12 years ago, i sure you can just copy that into CFX