The "busy" cursor and "background busy" cursor are frequent sights in Windows.
You say, "...I haven't seen a wait/busy/hourglass cursor in quite some time." I believe this is because you have grown accustomed to them and no longer notice. Open Microsoft Word (2010), click on the "File" ribbon and click "save." You will see the "busy" cursor flash a few times. If you actually save a large document, you'll see that cursor again. This behavior exists in Adobe products, Microsoft products, IDEs, Open Source software and a large variety of software. These cursors are still there and still useful. These are not "operating system" using them, but applications. These application developers had to intentionally put the cursor in place; either by virtue of API or explicitly.
These are not only used by the OS, but also by any application. The icons serve an important purpose. In the case of the "busy" cursor, it indicates the the application/program will not accept input. In the case of the "background busy" cursor, it is an indicator the the application/program is in the process of performing an action, but that it will still accept input. The latter is useful to hint that the system may change while the user is interacting with the UI.
I believe these are still "relevant" and should be considered as part of any Windows or desktop design. This allows the user to continue to interact with the other applications and know that your application is "working." It conveys to the user something more meaningful than an unresponsive UI. This works two-fold: 1) The progress or "busy" indicator is seen only to apply to the area with mouse hover focus, 2) because the cursor is no longer a pointer, it reduces the users' expectation to use the cursor in the affected area.
If you are questioning the value of progress indicators in general: Is it bad UX to omit a progress indicator?Is it bad UX to omit a progress indicator?
