Even with Smart Mouse off ... running Windows 7(Parallels) in a "window" or full-screen ... the mouse goes beserk if you move too fast. STEPS: 1. Move mouse back and forth slowly and note how nicely it tracks. 2. Now open a "My Computer" and click-hold on the title bar of the open window so you can move the window around the desktop. Center it in the desktop and while still "holding it", move the mouse in a circular motion. Make little "circles" on your mouse pad. Do this quickly and you will see the effect (bug). The Window starts dancing back and forth in a non-regular pattern. It may even start to go off to one side of the screen. 3. Now move your mouse in a circular fashion slower and it does not do this. (while still holding the window) This is the best way to demonstrate the bug. All of us who use Parallels for gaming are having this dreadful issue. It is making an otherwise pleasant gaming experience in Parallels a nightmare. Since games require fast/quick mouse movement. SYSTEM NOTES: I am using a simple two-button Logitech wired mouse in OSX, no custom Logitech software installed. I did install the Logitech software later to see if it helped, it does not. I have since completely removed the software once again. OSX 10.7.4, ATI, 8GB, i7.
Found this thread about this issue.... (it does fix it, but has some catches) http://forum.parallels.com/showthread.php?t=105520
