The answer (using James Black’s help) is:
HTML
<div id="sketch"></div>
<img src="https://stackoverflow.com/questions/1677848/cat.jpg" class="follow" style="position: absolute;"/>
JQuery
$("#sketch").mousemove(function(e){
$('.follow').css({'top': e.clientY - 20, 'left': e.clientX - 20});
});
Jsbin demo here.