the cursor will only fade away if it's not placed over any controller.
the controller will only fade away if the cursor is not over the controller.
if your still having trouble:
Check to make sure the setting is still enabled:
open "DVD Player"
go to the menu bar
click on the "DVD Player" menu
chose preferences
when the preferences menu pops up
click on full screen
make sure "HIde controller if inactive" is checked
the defaults seconds should be "10"
then click on windows
under windows make sure "fade controller when hiding" is checked
then click ok
if your still having trouble
http://support.apple.com/kb/HT1582 to see if your computer is quarts extreme compatible / meets the requirements for quarts extreme.
let me know how it works out
cheers,
-TT