I had the same problem in Arc's Swordsman alpha. Sent an email and it was fixed in a week. Can be done.

Yup - early on. I've not given up yet. Might write my own driver or start a virtual XP machine. No time yet.

Just one last idea, have you tried to disable the steam overlay for the game?

Thanks Martin. Had turned it down as low as possible. Even went into the INI file and put in a much lower floating point number. No go.

Try to decrease the mouse sensitivity in the game, there is a setting for it as far as i remember

I don't think they care anymore. Might have when it was a bunch of devs with some beers and a big win, but it is a different vibe now.

Just finished Windows 8.1 testing (which has a specific update for HID issues that make games spaz out). Keyboard issue is 100% solved. Mouse is so over sensative as to make it useless.

Shame on you Steam.

Test, care, refund.
Pick any two.

Yeah steam is terrible with that. When I found it doesnt work i asaked for a refund and they told me it is not their problem and I should contact pirana bytes (which sold the game years ago, so they dont really support it). So I spent hours on forums figuring out how to make it work. I sent them what I posted here so the would be aware of the issue and could put it in the description, but I doubt thed did anything about it...

StinkySQL Just now Delete
Tried those type of fixes. In the days since my original March post I have limited the potential root cause to Windows, possilbly a HID update for 7 prof 64 bit. Still don't know for sure, but I have uninstalled EVERY product, including steam with the same results.

It also turns out that a LOT of games are broken now that I go back to them. Even ones that I played for years.

My comment stands then as it is directed at Steam, not the game per se anymore. I bought from Steam because it was pretty much garunteed to work - that is what their value was, and they spec'd this to work with my OS. So yeah, I want my money for all the borked games back.

Doing tests in other OS's and computers now, but I shouldn't have to. Steam should have already done thier due diligence.

Well I did all I mentioned in the previous comment plus RUNNING IT IN COMPATIBILITY MODE for Win XP (sp2) it worked for me for the Gothic 1 (on win 8), I just finished it. And G2 seems to run as well

Yeah I read all that martin. Thanks for the kind thoughts. I bought all three games and they all fail. I have over 300 games and have done lots of trouble-shooting in the past, even fixed some with affinity hacks. These, well these and two others are the only ones I simply could not get working right. Throw-aways. Maybe I'll make an XP VM when I get some time, but for now I'm on to something else.