A few more bits of information. I've reinstalled VMware Tools a few times. Mouse focus problem does not occur when Tools are not installed, however once your mouse is inside the Citrix session, it is locked inside and you can't float between in and out easily.
I reinstalled Tools but left out USB Mouse driver. Same as above.
I then added USB mouse driver - problem again with focus. When in this state focus is even out of whack OUTSIDE the Citrix session, on the VMware Fusion desktop. When Citrix session is torn down, mouse goes back to normal.
It's something to do with the when the USB redirection is in play.
Also - this mouse focus problem is not an issue when running the same Citrix desktop session on the Mac host. Just in Fusion.
Thanks