I don’t use more than an external display or my MacBook’s internal display since managing a multi-monitor setup isn’t practical with Lion, but in the rare occasions that I do, my cursor always finds a way of wandering off the display I’m working on. EdgeCase boxes your pointer in the current display by putting up a virtual barrier that prevents your cursor from crossing onto the other display unless you hold down a specific key or wait a half-second.
As a simple menubar utility, EdgeCase lets you disable and enable the utility and click one of a few options to get it up and running. By default, EdgeCase will require you to bounce your cursor when it reaches the meeting edge before it transverses displays, but you can turn it off if you desire. Holding down the ctrl key or command keys will grant you access to third party displays: command-dragging app windows will let you carry your application between displays.
I’ve been using EdgeCase to process email and write on one display while watching videos on the other: it’s pretty useful for keeping work and entertainment displays separate. EdgeCase is $4.99 from the Mac App Store.
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