Ive been lazy in posting this, but here is a pic of the PC put together.
Are you a Gamer ? Have you increased your mouse rate ?
The mouse rate is how often the mouse movement is checked, and XP default settings are substandard for todays optical mice.
The PS2 connector ( round and often green ) is the best to go for since it does not use as much CPU usage as USB. The rate for this can be changed by going into the Device Manager, Mouse Properties, Advanced Tab, and increase the Sample Rate from 100 to 200.
For USB, the defaults are even slower, if your mouse came with a USB to PS2 adapter then its worth using. Otherwise increase the rate by making a change in the Registry, it can be done manually but I would use a free program such as the TechConnect Mouserate Switcher: