I have this very same problem. My specs are as follows:
Asus P5WD2e-Premium
Pentium D 805 @ 3.6ghz
2x1024 OCZ DDR2-800 rev2
2x160 Seagate in Raid 0
ATI Radeon x1950pro
Sound Blaster Audigy
Windows XP SP2
Whenever I move my mouse, cpu-usage hits 50% in Windows. In game, it must be hitting 100% because the game completely stops until I stop moving the mouse. It's basically like hitting pause while moving the mouse. I've tried the following games:
Warcraft 3
Half life 2
Guild Wars
Call of Duty 2
Battlefield 2
FEAR
The only exception is Battlefield 2. It works pretty much fine. The menu's lag a bit (in between rounds, the "join game" button doesn't work if you're moving the mouse
and the menus are a little laggy but in-game, mouse-movements are tracked as normal). Also, in FEAR, while the mouse causes stuttered movement, I had my xbox360 controller set up and it worked fine (it was using joystick axis, not emulating mouse movements). This leads me to believe that this issue is not related to USB ports. However...
Since I've tried more than 1 mouse in more than 1 USB slot and I've even tried using an xbox360 controller to emulate mouse inputs and none worked, this is not an issue with the Copperhead. I tried updating the drivers/firmware of my Copperhead, however, and was unable to update the firmware; just the drivers. I got an error when trying to update the firmware. Did you try this?
I decided to boot up a few more games just to make sure. First up was Quake 4. It worked flawlessly. It's running openGL. So I got curious and booted up Prey. It worked flawlessly as well. I don't really know what this means but I've already re-installed directX and it didn't do anything for me. This more or less rules out hardware unless OpenGL doing something with mice beyond my comprehension (I'm thinking no).
So it could be a USB issue but it doesn't look like it to me. Someone with more experience and knowledge may have a better answer than I.
So the conclusion I have so far as that BF2 is doing something (or not doing something probably) that the other games are not because it works fine while in-game. And it doesn't seem USB related as the rest of my devices work as expected (nostromo n52 and xbox360 controller and this very keyboard I am using to type this, the Microsoft Ergonomic Keyboard 4000).
Any help or insight is greatly appreciated.