That's what I assumed. If I just moved my mouse a couple pixels I usually got the same pointing image back. I think they just divided it up into regions and then load the appropriate image for each region.
However, if that's all they're doing, it seems odd that it takes so long to load... Maybe some of that's just a built-in delay to keep from constantly cycling images from someone who's bumping the mouse.
The delay might be to build up suspense. The two–three seconds it spent loading I spent thinking "how could something that's essentially xeyes possibly take this long… ohhh haha very cute"
However, if that's all they're doing, it seems odd that it takes so long to load... Maybe some of that's just a built-in delay to keep from constantly cycling images from someone who's bumping the mouse.