We are running on Microsoft Windows 2008 Server Standard R2, after installing VMWare Tools, the mouse performance is still annoyingly jerky. In Windows 2003 or XP just installing the VMWare Tools and setting the Troubleshooting “Hardware Acceleration” to “Full” fixes the problem.
However in Windows 2008 Server R2 the driver picked up doesn’t seem to be the correct one for the display adapter. To fix this do the following:
After installing VMWare Tools and then rebooting, open “Device Manager, find the display adapter, should be called “Default VGA Adapter” (or something), select “Upgrade Driver Software”. Then select to install the driver from this location: C:\Program Files\Common Files\VMware\Drivers\wddm_video
Once the driver is installed, then reboot the server. And you should be working with a nice smooth mouse, some people have also suggested to set the video memory to 32MB, I didn’t need to do this though.This site gives a very good overview of the problem and a solution also: http://ict-freak.nl/2010/12/27/slow-mouse-performance-on-windows-2008-r2-virtual-machine