UT99 Mouse Issue

Hello guys,
Finally getting UT99 to work on my computer. But the mouse movement is so sluggish and feels laggy. It is unresponsive unless I make jerky movements with the mouse. I have a Logitech g500 gaming mouse.
I have tried adjusting all the 'input' options, like mouse smoothing, mouse sensitivity. its not the sensitivity that is the issue, it doesn't detect minute movement for some reason.

Note: this does not occur in the menu. the mouse is responsive , smooth and sensitive.

driver says: videodriverclassname. it precaches, not exactly sure. don't want to mess with it too much since its finally working on the newer machine. its also in a window only.
Computer specs:
windows 7 64bit
asus z68
16gb ddr3 ram
GeForce 670
asus xonar sound card
500gb storage.

thanks for any suggestions

UPDATE:
I just switched over drivers to software rendering from direct 3d it was on and its working. I think the textures aren't as good , but its so much better. no mouse issue.
I wonder how 3dfx glide would do..

card is a GeForce 670. I have the latest driver and directX for bf3, etc..

I switched over to openGL and it looks nice. thanks for your help im checking out your links.
Do people still play much online? usually cant find much, maybe a server or two.
used to play on "pluribus" server that was awesome.

thanks for the info. I cant find many populated servers. the ones I joined were incredibly laggy and started with all weapons. I used to play DM about 12 years ago. I liked the servers with 32max players. id consider renting a server if enough people would play vanilla DM