Use offsetX and offsetY to position the fake mouse cursor.

remoting/webapp/crd/js/client_session.js

 // Copyright (c) 2012 The Chromium Authors. All rights reserved.
 // Use of this source code is governed by a BSD-style license that can be
 // found in the LICENSE file.
 
 /**
  * @fileoverview
  * Class handling creation and teardown of a remoting client session.
  *
  * The ClientSession class controls lifetime of the client plugin
  * object and provides the plugin with the functionality it needs to
@@ skipping 158 matching lines @@
   this.callOnFullScreenChanged_ = this.onFullScreenChanged_.bind(this)
 
   /** @type {Element} @private */
   this.mouseCursorOverlay_ =
       this.container_.querySelector('.mouse-cursor-overlay');
 
   /** @type {Element} */
   var img = this.mouseCursorOverlay_;
   /** @param {Event} event @private */
   this.updateMouseCursorPosition_ = function(event) {
-    img.style.top = event.y + 'px';
-    img.style.left = event.x + 'px';
+    img.style.top = event.offsetY + 'px';

[kelvinp, 2015/02/20 21:46:22]

Is this ToT?  This function has been moved to desktop_connected_view.js

[Jamie, 2015/02/20 22:46:03]

No, I was behind. Thanks for the heads-up.

+    img.style.left = event.offsetX + 'px';
   };
 
   /** @type {remoting.GnubbyAuthHandler} @private */
   this.gnubbyAuthHandler_ = null;
 
   /** @type {remoting.CastExtensionHandler} @private */
   this.castExtensionHandler_ = null;
 
   /** @type {remoting.VideoFrameRecorder} @private */
   this.videoFrameRecorder_ = null;
@@ skipping 1519 matching lines @@
  * @param {Object} message The parsed extension message data.
  * @return {boolean} True if the message was recognized, false otherwise.
  */
 remoting.ClientSession.prototype.handleExtensionMessage =
     function(type, message) {
   if (this.videoFrameRecorder_) {
     return this.videoFrameRecorder_.handleMessage(type, message);
   }
   return false;
 }