It sounds like maybe you have some cursor acceleration matching issues. In the 1.3.2 version I'm using, this works very well. Note that I use the KVM feature 24/7. Here are a few things you'll need to verify:
  • Control Panel --> Mouse --> Pointer Options tab --> make sure the slider for pointer speed is the same on both PCs and the "Enhance Pointer Precision" setting is unchecked
  • UI Scale slider in WOW is exactly the same on all clients (you can do this more easily by editing the config.wtf and making sure the value for SET uiScale "x.xx" matches)
  • Make sure all of your windows have focus. This is most readily ensured by enabling your server sounds for "enable key broadcasting" and "disable key broadcasting" and checking the box for "pause broadcasting when alt+tabbed"
Once the above are done, I just roll the mouse across all 4 machines so it "stabilizes"(*) the mouse accel on them and verify that the sound for "broadcasting is paused" dings on any of the clients, then I'm good to go.

Hope this helps.

* I say "stabilizes" because it appears that if you're on the desktop, octopus somehow uses a different pointer speed than if you have WoW open and in focus. Sorry I can't describe it better but I don't much care because it Just Works(tm). :P