flyingwysiwyg,
If you have a hub, make sure it is a powered hub. USB has much greater bandwidth than PS2. If you only have a mouse in your USB Port, your mouse will refresh at 120 times a second (as long as you are not sharing the bandwidth with other devices) vs 40 times a second in a PS2 Port.
To test, plug the mouse directly into one of the USB Ports hardwired into the Motherboard and remove any other devices and hubs from all your other USB Ports and lets see if you still have the problem.
Take Care,
Richard