By default, OSX doesn't let iShowU / iShowU HD see mouse and keyboard events. An option in System Preferences needs to be enabled in order for mouse animations, global shortcuts and keyboard compositing to work as expeced. Here's how you do it:
- Open up System Preferences, and click on Accessibility
- Look down the bottom for the option called "Enable access for Assistive Devices"
- Ensure that this option is enabled.