Latest Parallels Tools Driver Update Broke Smart Mouse

Smart Mouse not working after automatic Parallels Tools update

The problem:
After receiving an automatic Parallels Tools update last week while working on Windows 7 (64-bit) through Parallels 7, my mouse stopped working in Windows. All I could see was the pointer jumping around appearing and disappearing on the left side of the monitor when I would move the mouse around.

My software and hardware:
Computer: 15" Macbook Pro - Early 2011
Operating system: OSX Lion
Virtual Machine: Windows 7 64-bit via Bootcamp
Mouse: USB Logitech M525 mouse
Keyboard: K750 keyboard

All drivers are up to date.

What I've tried:
1. Removed the virtual machine and recreated it.
- When recreating it the setup would startup Windows, but would show a black screen when it went to install Parallels Tools. So, I had to boot into Windows through Bootcamp and manually install Parallels Tools. Then I rebooted the computer back to OSX. I clicked on "My Bootcamp" and the configuration began again and this time was able to get past the black screen hang up. During the process Parallels Tools was automatically reinstalled and again I saw the automatic update that initially caused the problem. Finally, after being able to log into the VM, I saw the exact same problem was happening.

2. Configured Smart Mouse to "Off".
- This was able to allow me to see the mouse on the VM, however is very unresponsive and laggy, even after changing the mouse speed settings in the VM.

This driver update is the culprit from what I gather:


Please advise on how to fix this issue.

Thanks in advance.

 

Smart Mouse? Not so much.

After about 2 weeks using parallels 8 with windows 8 pro, smart mouse suddenly has me clicking 2 inches to the right of my actual cursor. Turning off smart mouse realigns my cursor, but slows it down TREMENDOUSLY.

PLEASE Parallels, this is an often seen problem. Is there a fix?

 

Problem Update

Not sure how it happened, but the resolution of my monitor got changed to one that's not native to the actual monitor.

The mouse position error worsened as the cursor got further from the right side of the screen. After resetting the monitor from 1440x816 to 1440x900 (optimum resolution for current monitor) the problem was corrected and I could turn on smart mouse.

 

@ozmosis Please try to enable Optimize Modifier Keys for Games at VM Configure > Options > Advanced

@DanHar Reinstall Parallels Tools as suggested here: http://kb.parallels.com/4841