I love replying to my own posts.
Anyway, after much research through many threads on many sites, it seems that not even changing mice helps this issue. Once you have it, it stays. Really, really weird. My BT MM worked awesome for about 1 week then suddenly - kaput on the tracking. Bottom line - I went back to my Logitech wireless USB MX600 and it works great. But it's so ugly....
If any of you hear about a fix for this, please post it.