I have probs with my MS Intellimouse Explorer, where the optics don't like certain surfaces which are too smooth (textureless) and/or monochromatic, such that movement either cannot be accurately determined, or it cracks a spaz and resets the coordinates to 0,0 and I can't get it to normal again without lifting it up and replacing it and wiggling it around a lot. Damned annoying in the middle of a game, let me tell you. I have since found the best surface for it is the soft fabric of the arm of my lounge chair in which I sit in front of the computer. Not that I have that luxury on LAN days. I also have probs with it that I don't get with the PS/2 mouse, like chunking movements (reduced sampling rate / ultra-reduced USB bandwidth) - but I have traced that to a crashed background task, which I can usually clean up by trashing dead tasks I find in the task monitor (Ctrl-Alt-Del) In your case, it might not even be a crashed task, it might be an unwanted background task - all you SHOULD have running in the background are:
Explorer
Systray
you might also have:
Syshook
and if you have Norton Antivirus:
Csinject
Navapw32
I have something else running called Starter, can't remember what that is for offhand - but both my mice (USB and PS/2) run fine together with all that.