Drivers up to date but in your position i would do the following. The mouse issue for me is typicall VGA issue ( at least for my experience).
Remove all drivers for the VGA and do it with the tool mentioned above to be sure everything is removed properly: http://www.guru3d.com/category/driversweeper/
Then download fresh dirvers from ATI page and reinstall.
If this does not help check your DirectX if everything seems okay there ( you might ron the stupid tests inside sometimes, not very often but rarely, they reveal issues).