I'm sorry, it's a bit hard to explain... let me try it with my 1337 gfx skills:
IDEA: KCOAW - keep cursor over active window
When I'm only in IRC (= green / the blue thing is the desktop), the mouse cursor will usually be above the IRC window too. When I open a message dialog (because I got a private message) it pops up (= red on the image) next to the IRC window, getting focus while the cursor automatically centers above it (this situation is being shown on that image). When I send an answer this automatically closes the message dialog, resulting in the IRC window getting back its focus but the mouse cursor won't be moved back over the IRC window, it stays where it's being shown on that image (hence "but the mouse cursor stays in its old place").
I hope I won't have to come up with more images...?