Mose Floater
No new software or Win XP updates.
Mousepad is a sheet of newspaper.
Suspect that it is just a software interaction. However it is very temporal (i.e. sometimes it happens and sometimes no sign of it for hours). Once it goes nutz it just slides off-screen. I've seen it before and I've never managed to fix it. On my Dell 8000 I've got a green USB adapter plugging the mouse into the old circular mouseport (as a fix that works).