[ianyh]

This is a woefully confusing decision on my part. There are actually two features: mouse-follows-focus and focus-follows-mouse.

The former just means the cursor moves along with window focus. So if you cycle to the next window clockwise, the cursor moves to the center of that window. Or if you focus a window on another display, the cursor moves to the center of that window. This makes it really convenient to do things like navigating between spaces on multiple displays as the display with the cursor is the one who responds to space switching.

The latter is probably what you're thinking of. You move the cursor and the window underneath it comes into focus. It's kind of experimental and still seems to be fairly buggy, though.

The "impossible" thing is that in OS X there is no distinction between the window that is focused and the window that is the keyboard responder, so the classic idea of focus-follows-mouse doesn't work. I haven't found the distinction personally very meaningful.