I'm having the same problem
I am having the same problem. My mouse pointer freezes in place, but I can still activate things by guessing (and using highlighting, etc.) to determine where my cursor is located. It started just a few days ago...the mouse had worked fine before. I can't pinpoint what I'm doing when it happens, but it seems to occur if I'm trying to multitaks while doing something kind of intensive (defragmenting, burning CDs/DVDs). It's a real pain in the rear.
I have Win XP SP1 (was SP2, but uninstalled that, trying to see if it would fix the driver), nVidia GeForce 5200 AGP graphics card. Updated the drivers for the video card yesterday, that didn't fix it. I can't find mouse drivers that are better than what I have, though my mouse drivers are dated 2001. I did install "browser mouse 1.0" for my Micro Innovations optical mouse yesterday, that didn't work.
I thought maybe I accidently cleaned something from the registry that might have caused it, so reinstalled everything that I had cleaned from the registry. That didn't work.
I can't figure it out. The only things I haven't tried is unplugging/replugging the mouse and uninstalling the mouse from my system and rebooting. I think I'll try those now.
Otherwise, any tips?