I have a number of aterm's set to appear without
borders and stuck onto the desktop (ie the are always
below other windows and are sticky across workspaces).
However, they each have a silly cursor sitting at the
bottom, which is entirely redundant. Eterm has an
option to disable the cursor (precisely for this use),
perhaps aterm could too?
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aterm, eterm, rxvt, xterm etc.. all have an escape sequence
to switch off the cursor, just look in the reference manual.
also, you could try giving the cursor the same colour as the
background