Rockbox should save the settings before it goes into USB mode, so I think your config.cfg may be corrupted. Since you have your setting saved as myfaves.cfg or something, connect to PC and delete config.cfg, copy myfaves.cfg and rename it to config.cfg (all should be inside the .rockbox folder). Rockbox should save the settings before it goes into USB mode
The correct setting for the pointer is this
invert cursor: off