The problem is, that when you tap the screen both click and mouse move are registered. So emulator first clicks in the previous mouse position, then moves the mouse to new position.

I was thinking all evening and morning how to overcome this and came up with a solution - delay click until mouse is static again, or warp the mouse immediately (which in turn could make apps crazy).

Your solution is brilliant. I will disable the touch screen clicks completely, and use volume buttons for left and right mouse buttons.