Yeah you're right, it's got nothing to do with the actual silicon. But I didn't come up with the term "hardware cursor", that's just what it's called. The lag is indeed a rendering effect, caused by that missing third buffer (frame buffer 1, frame buffer 2, "hardware cursor" buffer). With a hardware cursor enable game, the frame buffers don't actually pass -everything- to the screen, only a part of it. You never wondered why the mouse pointers of some hardware cursor enabled games don't show up in some screenshots?
More explanations can be found
here
here
and here