Not in windows desktop itself without some
major driver and system changes. Also depends on which windows you are taking about.
However, it is possible to build an
application that draws two pointers itself instead of letting windows draw it's pointer. The app would then track it's pointers instead of the invisible windows pointer. Here's one such app:
http://www.cs.umd.edu/hcil/kiddesign/kidpad.shtml but it only works on winMe/9x with USB mice. (I based Mame:Analog+ off of the methods used here.)
I understand that there also is a way to do multiple pointers in winXP, but it's a different method that might not be fast enough for playing games (mame), although good enough for normal windows applications. It has to do with RAWINPUT and RAWMOUSE (try searching microsoft for more data). This method only works in winXP, though, and I am not as influent in it as the first method.
Microsoft still believes in the Personal part of PCs, and the one user, one monitor one keyboard, and one mouse assumptions always grouped with the "Personal Computer" theory.
(Actually, the first two are fading away, years after they left the workstation sceen.) This makes it hard to do anything that does not fit the "personal" ideal. I say "So what if it has personal in the name? What's in a name? A rose by the name of workstation would run just as fast." (sorry Will, had to paraphrase you)