LinuxQuestions.org - Mouse problem, or graphics?

I posted in this forum because I'm not sure if what I'm having is a hardware problem, a software problem, or both.

I have a Genius NetScroll+ PS/2 mouse, and I'm using Vector Linux 3.2 SOHO (It's 100% compatible with Slackware 8.1). Anyway my mouse wasn't supported during the install, so I just used a generic 3 button PS/2 driver. It works, but I cant use my scroll wheel, and worse, when I move the mouse over certain areas of the screen (menus for example) I get two lines appearing just below the cursor (here's a screenshot).

I'm not sure if it's being caused by my lack of a proper mouse driver, or something wrong in my graphics settings. but since it does it regardless of what WM I use, and I've never had the problem using other distros (which supported the mouse) I'm guessing that's it.

Can anybody tell me how to properly setup my wheel mouse, and what could be causing those lines, it's driving me insane.

Thanks.

EDIT: Well that's interesting. I cant give you a screenshot, because they don't actually show up on one. That makes me even more sure it's just a hardware problem.