Well the mouse pointer in Xmas Bonus had an alphamap which I used to blend the edges (and shadow) with the backgroud. This is basically a bitmap with a white central portion and a grey outline. Then when you render the mouse pointer you use Writepixel fast to draw your normal mouse pointer and where the alphamap is white, draw it full strength colour and where it is grey, blend the pointer colour with the background. This gices an antialiased edge no matter what you move over. For me it was the only viable solution, sorry if it's a little complex.
How to create a good mouse cursor
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