Showing two mouse cursors? Whats up with this?:

 

When I have a mouse cursor size that is bigger than the actual mouse, this shows up. Please help! It is really annoying and it makes my computer lag. It does not survive a reboot, but right when someone else logs into my computer or I log out and then log back in, it starts again.
One issue could possibly be with the Shake mouse pointer to locate.

To turn it off:

Go into System Preferences -> Accessibility -> Display.

Uncheck the option: Shake mouse pointer to locate.

This might fix it but I'm not sure.