Mouse slows way down

I have a 700mhz Pentium III with 300 megs ram, running win98se.

When I am running Defrag, the mouse barely moves. I have to keep
stroking it across the desk to make it move an inch or so. Because of
this, it's near impossible to easily select the drive to defrag, and
impossible to open another application. The problem is not the mouse
itself, or a dirty mouse ball. The mouse works fine the rest of the
time. It's like the system just puts all it's power to running defrag
and the mouse loses all power. Using Speedisk from Norton Utilities
is even worse.

The mouse itself is a common Microsoft ball mouse with a PS2 plug.

I have an older computer which is a Pentium 266 with only 64 megs ram,
and a much smaller hard drive. I can use the same mouse on that
computer and run defrag without most of this problem. (also Win98se).
I use the word "most" because there is a slight mouse slowdown, but
not a near halt that I experience with the PIII 700mhz.

This really makes no sense to me. I'm running more than double the
power and the computer cant supply enough power to the mouse. What
causes this?

One final note, when I copy a large file from one hard drive to
another, (like a large MP3), the mouse tends to get slow too, but not
nearly as bad.