I am using Kubuntu 8.04.1 with Kde 3.5.[^*newbie^*]

I have a peculiar problem that is driving me..*^^^*.. My habit is to
open a window [say "mousepad"] and then move my cursor off to one side
to work.

If my mouse cursor isn't sitting directly on the window i am using i
can't do anything in that window.

How do i set it up so that if my cursor is not on the "currently"
open window, I can still type or work in that window.

I have checked in System Settings >Appearance
>Desktop
>Keyboard & Mouse
>Window Behaviour
and can find nothing that I can understand that would change this.
I have done a search on Google and your forum, but to no avail.

you need to go into system settings - window behaviour and change the policy to "click to focus"

now you ought to be able to move your mouse away without the active window losing focus.