you only have to move the mask image around like you would move around a regular scene object image/animation as masks are assigned to regular scene objects.
as far as I remember, you would create a black or semi-transparent black/dark colored image to overlay over the scene, you would then create an image of a circle in white - needs to have a bit of transparency around the edges of the image - white image can also be faded towards the edges if you want to create feathering. you assign the circle image/scene object as the mask & the dark image/scene object as the object you want to mask. don't forget to assign a condition to the masked scene object image to hide it from the scene as it's not needed.
Create a mainLoop function to update the position of the mask image - don't forget to offset it to center it on your cursor, as the position will be the top left of the image by default.
That's about all I'm going to say for now. Just woke up not long ago, but maybe I can make a small example later on. You are using visionaire studio 5.x, yes?
oh wait... don't need to make an example. it seems I already have a mouse position with circle in a test mask ved I have been using for testing out the different things that are possible with masks. here you go: https://www.dropbox.com/s/5ytox8bee4pv8ur/mask_test.zip?dl=0
set default scene to 003_mouse_pos
quick note: in that example I inversed the mask & object image colors. it all depends on exactly what you want. white object will be affected completely by the mask color, whereas a white mask will show the original color of the mask. the masking system uses multiply, so you need to that into account. I am also incorrect in that being the correct example of usage, as you are wanting to cutout a transparent bit in the dark image & not just show it, so that requires a fullscreen mask which is kind of buggy. anyway, like I said... I'll have a look into it later on - if I remember.
P.S: have you tried using shaders? probably less hassle overall & Simon or someone could give you a working flashlight example.