OK, so it is the now cursor.
My DAW running the last few versions of SONAR has issues with that cursor as well. In my case the now cursor starts to move, and then arbitrarily stops. (no it's NOT the scroll lock key problem) And, as in your case, playback and recording are not impacted. What's really odd in my case is that once it stops moving I can control it using the jog/shuttle wheel on my Radikal SAC-2.2 control surface ... As the song plays back and/or recording is taking place, the entire track view appears disconnnected from the actual playback and the jog/shuttle wheel has full control. This also happens if I power up w/o the control surface, but it just stops moving.
I have also seen the "false start" problem where I have to hi play or record twice, but not in the latest release.
In both cases, I still could make music, so it's only been mildly annoying, not a show stopper. Not too many people have problems like this, so it's got to be related to our system setups.
I'm about to build a new DAW, the first update in about 6 years, and the only part of my old DAW that will move forward is my Dakota/Montana sound card duo, and my DVD writer, so I'm hoping the problem will magically go away.