Jcurves comes with more than one virtual controller (depending on which driver you used, this may vary. Mine has two). If you're not getting both cross-hairs to move, right-click the big green square and make sure you're displaying the same controller you selected from the virtual joystick dropdown box. In other words, if you're using Virtual Joystick #1, make sure this is what's actually displayed, not Virtual Joystick #2.
Once you have all that working, when you are ready to assign your mappings in ED, don't touch the stick (or throttle) at all. Select the axis you want to use in Joystick Curves and tick the "Virtual axis test loop". Leave this running and Alt-tab back to elite. Click the axis you want to map and wait for it to be detected. Go back to JCurves and untick the box. Wiggle the stick (or throttle) to make sure everything resets back to zero. Repeat for each axis you need to assign.
There's a really useful tutorial video in
this thread.
I totally agree, having the curves built into the game would be a huge boon, as I would have one less app in my Startup folder. Last time it was mentioned to the devs they didn't see a need for it :S. Maybe a petition is called for...