Author: Erwin Molendijk

Using the Windows API function ClipCursor, it is possible to restrict the movement 
of the mouse to a specific rectangular region on the screen.

Answer:

1   //restrict the mouse mouvement to form and release
2   //this restriction after a click on the form
3   
4   procedure TForm1.FormCreate(Sender: TObject);
5   var
6     r: TRect;
7   begin
8     //it would be good idea to move the
9     //mouse inside the form before restriction
10    r := BoundsRect;
11    ClipCursor(@R);
12  end;
13  
14  procedure TForm1.FormClick(Sender: TObject);
15  begin
16    //always be sure to release the cursor
17    ClipCursor(nil);
18  end;