I have this problem as well. It's something that most likely has to be fixed in the emulator.
You see, in MAME and real light gun games, you point the gun at the screen, it reports back it's X and Y coordinates. This would be called absolute position data (or something like that).
Some software, like Model 2 emulator, don't work like that. It expects a regular computer mouse. So your cursor would start at a point on the screen, and you move the mouse. The software interprets this as "go up 20 pixels, and left 8 pixels." Try to feed the absolute data type into that (like the Aimtrak, Act Labs, or LCD Topgun) and it goes all screwy.
Note that Model 2 only uses this when RawInput = on. When RawInput is off, Windows itself handles the inputs before passing the converted data to the program, allowing a gun to work. Two drawbacks to this are:
1.) Windows sets all the pointing devices (guns, mice, trackballs, spinners) to control one "software mouse" that it sends to the program. So, only one gun.
2.) The "software mouse" can interact outside the program. Bertthedefender, your question is actually related. Model 2, when full screen, is really still in a window, but changes the resolution to "zoom in" on the window. If you play HOTD, and click and hold the mouse all the way to the side, sometimes the emulator will pause and you get the window resize cursor, just like Notepad or most other software. That's with RawInput off. If it were on, the cursor can't interact with anything outside what Model 2 allows it to.
Sorry for the long post, but this problem has annoyed me for a long time. I even posted on their forum
here, but got no responses. I hope this gets fixed on the next version!