Hi Pluto,
Ah, I believe there is some interference between how the platform abstraction library that PixelCNC uses, SDL, and Virtual Desktop. When a layer handle is grabbed the mouse cursor is no longer actually being used and mouse motion itself is the only input that is being interpreted until the handle is released. Then the mouse cursor is positioned on top of where the handle was released.
I will do some digging to see if I can find anything about this being a known issue with SDL and Virtual Desktop.
Thanks for the headsup! :]
- Charlie