Assuming this is the same issue I just had:
I downloaded the VMs from Microsoft to let me test IE. They were Virtual PC images which I used as HyperV disks, creating a new Virtual Machine for them.
After booting, my mouse cursor was a small dot (not a cursor I'm familiar with), and clicking didn't seem to do anything. The keyboard worked.
After getting to desktop, I could click - the mouse pointer was not movable on the guest, but I could toggle desktop items (because Win7 has that 'show desktop' button in the bottom-right corner). So clicking worked but the pointer was trapped.
The fix was to go to Programs and Features (using the keyboard) and uninstall the VM guest additions (in this case they were VirtualPC additions that didn't completely work with Hyper-V).
After uninstalling them, mount the Integration Services Pack DVD (Hyper-V Action menu) and it will let you install it. After a reboot the mouse is working again.