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I've always just used the alternative input mode where you can put your finger down anywhere on the screen and it WON'T warp the cursor over there but leave the cursor where it was and just move it RELATIVE to your finger position. Works really well!

The problem with your idea is that, when the cursor is always to the top left of where your finger is, all of the sudden you can't click things on the right or bottom edge of the screen. :p

Oh, didn't either notice that relative behavior or it didn't work for HTC Explorer with Android 2.3.5. Will try again, thanks for the tip.

And yes, for the idea that I presented there should be the standard way activated for using the cursor when closing to the bottom corners.

How about a bit of redesign in the way how cursor handles for touch screens:

-Left and right hand modes for cursors.
-For the cursor not to hide under users fingertip, place the cursor to the upper left or upper right corner of the users fingertip, depenging on the cursor mode. I do not know without measuring how far in pixels this would be, maybe a configurable value?
-The effective cursor position would be the upper left or upper right corner of the cursor icon, depending on the cursor mode.

This way the user would be capable of "dragging" the cursor while actually seeing it and placing the cursor would be a lot easier. After dragging, tapping would initiate the action. By making cursor icons that would visually point to the upper left or right corner, the user would have better idea on where the game actually thinks you are trying to click.

The way you usually grab a tablet or a phone would in my opinion make this the most ideal solution for emulating a mouse; the effective cursor position to trigger the actions would be close to the continuum of your finger's position and angle.

Or do you guys prefer seeing your finger and nothing else, while trying to click that tiny object in your screen? Try a HTC Explorer & AGS if you do...