well... it's sort of fixed.
I tried running xorgconfig after all... after I cleaned up the mistakes it made with my video card, I had this:
#Option "Protocol" "ThinkingMousePS/2"
Option "Protocol" "IMPS/2"
Option "Device" "/dev/mouse"
Option "Buttons" "6"
Option "ZAxisMapping" "4 5"
# Mouse-speed setting for PS/2 mouse.
Option "Resolution" "256"
I switched to IMPS/2 protocol after the ThiningMousePS/2 worked EXACTLY the same as before. I think what's making the difference is the Resolution. I was sure I'd tried playing with it before, to no avail. well, at least it works now. (maybe xorgconfig did fix something else after all?)
I wouldn't call the problem 100% fixed though. The mouse motion is better than before, but could be better (it IS better in Windows, still). But I'm not sure I'll see any more improvements unless the ThinkingMousePS/2 protocol is fixed.