This problem was not observed while running from the liveCD, only after I installed to HD.
When I use text input boxes, like the search box in google or ebay: if I click in the text box, the cursor dissapears, and typing won't show any characters in the text box. This happens in other programs not just firefox, which leads me to believe it is happening at the OS level.
This was first observed while trying to write sketches in Processing 1.5, that is if I open a new sketch, the cursor is visible and I can start writing without any problems, but as soon as I click within the editor window (text area, like click to a different line or try to highlight text to copy) the cursor disappears and I am unable to type in the editor window.
What I've done so far:
Initially I booted a liveCD of DSL-4.4.10 to test with, then downloaded Processing 1.5(programming language), wrote some simple sketches and made sure DSL could run them, which it did, so the next step was to make a permanent installation:
I then used a 4GB CF with an IDE adapter, installed DSL to the CF as if it was a regular hard drive per the HD install instructions (installed smoothly, just followed the instructions), downloaded Processing 1.5, extracted and started to use like normal, its when I started editing text that the cursor problem began to show up, not just in Processing, but also in Firefox, which is why I believe it is not program specific.
Any help with this problem will be greatly appreciated, since this is the only problem I've run into so far.