I got the tip from Crazy Bob and decided to try it tonight. Win2VNC basically allows you to connect to a server (via VNC) and you can simply move your mouse onto that VNC-ed machine and voila - your mouse and keyboard are on that monitor. It's almost too cool to describe. The only issues I found where that it doesn't work well with multiple monitors. I have two monitors plugged into my XP desktop, and if I choose "West" as my direction (to switch to my PowerBooks monitor), then that works, but I can't get it onto my primary monitor - it only shows up on the 2nd monitor. The issue is better described on the user forums. The easy workaround is to go "North" to switch monitors. The other annoying bugs are no mouse wheel support and no Alt+Esc support. This thread has a few patches for this. The first patch I tried seems to work the best, with both Alt+Esc and wheel support. This other one has an installer, but Alt+Esc didn't work for me.
If you have a laptop sitting next to a desktop - you've got to try this software - it's what you've always wanted.