are you guys running the new drivers?
For the record, yes, I installed them before attempting to play the game.
And it's not so much "mouse lag," there's no real pause between input and response in the game, it's that the response is inaccurate and uneven... I've tried changing sensitivity in the game but it didn't help much.
Try setting mouse sensitivity to 1 in Bioshock and watch what you get. It's like some ridiculously bad acceleration algorithm. I'm betting if you can't see it on the other sensitivities you'll see it on 1. But it's like night and day going between 1 and 2. It's just weird.