I indeed also tried reverting to 1.4 but that did not help. 1.3 doesn't startup at all (some crash in MM8.exe). I did your trick of unticking "decorating windows" and it works! Wow, thank you very much! Too bad the music does not seem to work. Still great though, thanks again!
Glad I could help! As it turned out, it was a one-time glitch and the game does work in 1.5.1 as well as 1.4 (in 1.5.13 I saw the disappearing cursor bug you mentioned). If you're on Lion you also need to set ddr=gdi in Winetricks to get the game working in fullscreen. This unfortunately means you need to disable 3D hardware acceleration unless you run it in a virtual desktop.
On my current system (2006 MacBook Pro/Radeon X1600, 10.7.5) the game runs and looks very nice, even without 3D acceleration, in fullscreen using 1.5.1. Funny how M&M9 looks graphically worse
than M&M8 even though it uses the same engine technology as games like NOLF, AvP, Shogo, and Blood 2 (Lithtech 1.5).
Oh yes, and I'd highly recommend installing the unofficial patches for it by GreyFace, available here: https://sites.google.com/site/sergroj/mm