Got this from Technet article Q106373 :
"RESOLUTION
WARNING: Using Registry Editor incorrectly can cause serious, system-wide problems that may require you to reinstall Windows NT to correct them. Microsoft cannot guarantee that any problems resulting from the use of Registry Editor can be solved. Use this tool at your own risk.
Use the Registry Editor (REGEDT32.EXE) to edit the following entry:
HKEY_LOCAL_MACHINE/SYSTEM/CurrentControlSet/Services/i8042prt/Parameters
Make the value for KeyboardDataQueueSize and/or MouseDataQueueSize larger.
NOTE: The default value for both of these is 64.
The above service (i8042prt) name may vary, depending the type of mouse you are using.
Note: If changing the registry does notsolve the behavior, disable the NetFlex adapter driver from the devices. With some of the NetFlex adapters, if the card is not disabled, the events can occur and the computer may stop responding. "
hope thish helps