Oh! I'm sorry. That was dumb of me not to give system stats. I am using Windows XP Pro and SC v2.103.01, and Firefox 9.0.1. Yes, "capture cursor" is checked in the system tray menu.
I push printscreen, then select the area, just like normal, and when the "New Screenshot" window appears, there is no cursor in the image, even then. I know, it seems strange to me too. But I have always had this problem with SC - and I've been using it for several years now. I've never been able to capture the mouse cursor. As soon as I push printscreen, the cursor disappears - and it happens like that only in Firefox and Thunderbird. Every other program will allow the cursor to be captured.