I think the thing that I like best about this way is this:
Mouselook mode resets the cursor to your target circle on the screen. No more wondering where it will be. No more fumbling with it.
If you do happen to move it somewhere, just let go of R2 for a moment, then grab it again.
Cursor shows up right back to the center of the screen every time you need to use it.
Oh, and the only reason I mapped it to toggle mouselook was to swap back and forth between the two and compare.
I'm going to remap that as something else again soon and just leave it in ML, "freeing" the screen in combat with R2 instead of "grabbing" it.