Mouse Problem..
Here's what I did to fix it for me anyway..
Right click Desktop ->
Select "Properties" ->
Select the "Settings" tab->
Click the "Advanced" button ->
Select the "Geforce 2 GTS" ( or whatever the name of your video card is) tab ->
Then look on the left to a little menu and select "Performance and Quality Settings" ->
The middle scroll bar should say "Antialiasing" and range from Off to 4x.
You then move the bar all the way left so that Antialiasing is OFF.
Click ok on everything and start up AO.
Now try..