I know this clipping does not occur in the OSX port (SDL Mame) of v0.217 but it seems to make logical sense to implement it, especially on spinner or trackball games. I was playing Centipede last night with the Logitech trackball and found it distracting to have to reorient the mouse. I did better than using the joystick, though :-)

I don't have a Windows install readily available to check if the lack of clipping occurs there as well. I know in the WinAPI there's a way to determine the size of a window (GetWindowRect) so it shouldn't be that hard to do (ha, famous last words of course). I'm sure other windowing systems on other host platforms have similar calls (SDL_GetWindowSize, for example).