Mouse confusion

I have a computer with Windows Me (don’t laugh!) and about 576 MB of RAM. Recently, I had to buy a new optical mouse. Sometimes it works. Sometimes it turns the windows gray like they are behind another window. Other times if the pointer rolls across the title of the window it will turn blue, but still frozen. I have to open the program manager or alt+F4 to close it. The mouse will work on the desktop when these issues arise, but not on the start menu or the task bar. I have tried to limit my startup programs to the bare minimum in case something is not compatible. Any ideas?