I have been searching around for a fix with the laggy mouse in ESXi 4.1 for a while. Seems like when you install VMWare Tools it doesn't, by default, install the right GPU driver. Doesn't make sense since this is very important in the ability to use the GUI efficiently when you need to do a lot of clicking inside a VM. This issue only seems to effect Vista/7 hosts as well as their corresponding server counterparts such as Server 2008/R2.
To fix the mouse lag you have to go in the device manager and find the display driver and update it to use the one in the C:/Program Files/Common Files/VMWare/WDDM Driver/
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