I have seen this exact problem before, caused by two different issues.
First is a failing power supply. This can cause many issues, so it is usually a good place to look.
Second is an overheating video card or video chip on the motherboard. Windows uses hardware accelleration for the mouse cursor, but when hardware fails it has the ability to fall back to software mode, which is why you may have the cursor but nothing else.
Easy fix is always the best to try first. Get a cooling fan and put it in your case. Face it towards the video card so you get more cooling on the card. If this does not do it, run with the case lid off to see if it is just a general heat issue.
Buy a new power supply next. Go for a high efficiency one, might as well save electric bill money when you spend power supply money, right?