Hi, I've had this problem for at least a couple years now, and have never found a fix, despite lots of Googling for answers.
The problem? The text cursor stops blinking after a few seconds and you have to do some action (mouse, KB etc.) to wake it up. But of course it stops again after a few seconds. Tis happens in SPFLite, NotePad, and a large number of other apps.
Fire up RegEdit and go to HKEY_CURRENT_USER\Control Panel\Desktop and locate the CaretTimeout value. On my system it was set to 5000 (ms), so I set it to Hex FFFFFFFF, and the problem is gone.
There have been numerous questions posed to MS support over the last couple years, always with kiss-off answers like Adjust your cursor blink rate and get back to us. Surely someone at MS knew what the answer was, but never let it out.
Finally today I found the answer on SuprUser.com.
Hope this helps some of you. I can't be alone with this problem. Can I?