How do I make the cursor in Emacs a black box with underneath text displayed in white?
like so:

Screenshot is from the Carbon Emacs package, but I want the same behavior in Cocoa Emacs 23.
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At least in my version of Emacs, that is the default cursor. You can use
M-x customize-face RET cursor RETto change it, if you want. If you want to stop the cursor from blinking, you can useM-x customize-variable RET blink-cursor-mode RET.Update: Since you updated your post to mention the version of Emacs you’re using, I could confirm that this is a bug in Cocoa Emacs 23 for Mac OS X. I see what you mean – nothing seems to invert the character underneath.
There’s a patch to fix it (partially) here.
This and other issues ensure I’m still using Carbon Emacs.