I'm playing with a 360 controller, and I'm using 2 monitors. I could have my mouse cursor on 2nd screen(game is open in 1st monitor), but anytime I open anything(menu,map,maximing chat window, etc), the cursor will move from monitor 2 to monitor 1. I've already tried a few "solutions" through Googling such as unchecking "enable hardware mouse cursor" in FFXI config, changing keyboard setting to compact 1,2(idk why that was suggested..),and setting mouse setting to type 2 in config. Unchecking the "enable hardware mouse cursor" not only did nothing to help, but it turns itself back on the next time the game is started.

Is there some other things I can try, and does anyone have experience with this?

Just a guess. In your Ashita configuration try enabling Unhook Mouse.

Yeah, that's already enabled.