Dynamic input cursor

[helfreco]

My work machine was recently upgraded from XP to 7.
In XP, the dynamic input cursor would move when I moved my mouse, which was nice.
In 7, as soon as I start typing a command, my cursor will lock in position until I hit Enter.

Can anyone please tell me which Dynamic input setting I am missing that will allow my cursor to move while I am still typing a command?

Thanks a bunch.