I upgraded my Ubuntu VM at work from 8.10 to 9.04 and promptly started suffering from slow mouse, no matter how high I cranked acceleration in the GNOME preferences. Or in WindowMaker, for that matter. I checked that I was at the latest 2.0.4 Fusion release, and that my Ubuntu packages were all up to date. No joy.
Some googling and I found this post sort of helpful, in that it said to install the xserver-xorg-input-vmmouse package - but I already had it installed. So I dropped down to the CLI, stopped gdm, then removed and reinstalled that package and re-started gdm. Hey presto, mouse zooms around quite nicely.
Now I forget why I needed the VM, but at least I know next time I do, the mouse will work.
I had this same problem and your solution worked miracles for me as well. Thanks.
No worries, thanks for the comment!