Jon, I'm using VBox a fair bit and what you describe reminds of of some behaviour I noticed quite some time ago (maybe last year ??). I have therefore today upgraded from v3.2.4 to v3.2.8 (also on XP host) just to see if things have regressed. Unfortuantely I can't confirm your findings (yet), albeit I've only done some limited testing.
One thing that might be different between us is that I'm using a "wrapper" called
Portable-VirtualBox. In my view that leaves VBox a bit more flexible, e.g. when it comes to upgrading. But it might be that there is no tangible benefit and I'm just doing it because I've got so used to this modus operandi.
From memory (and I could be wrong and just confuse this with some other issues I once had with VBox) resizing the VBox window or changing from windowed mode to fullscreen and back to windowed mode (e.g. via "Right-CTRL F", then release the two keys, followed again by "Right-CTRL F") might have brought things back into line. I'm also not sure that the problem was limited to TinyCore, IIRC there were other guests (e.g. Slitaz) equally effected. Maybe the type of X server plays a role. With what I'm doing I get most of the time away with using Xvesa, but I can't remember if Xorg was involved when things were "going funny".
I guess the upshot is that you might need to carefully monitor under which conditions (e.g. which X server, windowed or fullscreen mode, ...) the "fun" happens. Maybe this way it can be better identified and a bug raised (presumably against VBox). I'm just not convinced that TC is the culprit here.