From Francis Bonnin:
Desktop Eyes is a small application for Windows. In fact it is a desktop toy (almost a virtual pet) similar to the xeyes program on Unix systems. Two small transparent eyes will watch your mouse cursor as it moves. You can have multiple eyes living on your screen. Those eyes can have any size, be partially transparent, stay on top of the other windows, and can automatically become opaque when the mouse is over them. Moreover, they have the option to be clicked through: they'll never get any focus.