Coherence Mode - Mouse is missrepresented

When in coherence mode only, the pointer is roughly 400px left of the visual representation of where the mouse "actually is."

Here is a screen cast I have created to better show the issue:
http://www.youtube.com/watch?v=HhD8uESTA-Q


Moreover, in all other modes, the mouse works correctly.

Running Windows XP in Parallels 7.

Any help to fix the issue would be appreciated.

 

Re install Parallels Tools

Found this in the Troubleshoot section. Sorry to waste time.

 

Just upgraded today to the latest Parallels 7 and having the same mouse issue described above in a Win7 VM. As suggested, I've uninstalled/reinstalled Tools but still have the same issue. Any suggestions?