It's a bit of a workaround, but one approach is to split the problem into two pieces: display and transmission. For display, you can avoid the cursor problems by using:

  text-transform: uppercase;

It's simple, the user experience remains natural, and there are no JavaScript dependencies. For the transmission phase, simply munge the actual entered content (which will not be all uppercase unless the user enters it as such) during the submit event. Of course you'll want to validate input on the server side as well.

Edit: clarity.