I'm having problems with Sanitarium. The cursor flickers and leaves trails, which makes the game nigh unplayable for me.
One solution that I could find online was to change the compatibility mode to Win98. This did not work for me. I also tried for force Vsync off (worked for MechCommander, which had a similar issue), but to no avail.

I'm running WinXP Sp3 on a p4 3.2ghz, 3gb ram and an Nvidia GeForce 8600GTS, and my drivers are up to date.

Same problem here. Also running WinXP Sp3. GeForce GT430, AMD Phenom II X2 550.

I've also got this problem. Running it on Win7.

Edit: Change the compability to Win95 and it fixed the problem