If your mouse is jerky or doesn't precisely locate, it may be because the client sends mouse strokes to the terminal server every 100 ms. You can reduce this interval on the client by using Regedt32 to browse to:
HKEY_CURENT_USER\Software\Microsoft\Terminal Server Client
Add Value name Min Send Interval as a type REG_DWORD and set the value to 10 (as a starting point). You should balance the additional network traffic angainst the improved mouse performance.
Windows NT Server or Workstation
If you have cursor flicker with a PS2 mouse, you can increase the sampling rate by browsing to:
Edit or Add Value name SampleRate, a type REG_DWORD. The default setting is 60 and the range is 60 - 200. Higher numbers are better.
Note: If you have IntelliPoint software, replace i8042prt with msi8042.