Hi Rich:
That file is located in Macintosh HD>library>preferences. Sometimes (rare, but it happens) preference files become corrupted - causing all sorts of odd behavior.
If that does not help, try resetting the PRAM:
http://support.apple.com/kb/HT1379
If that does not fix the problem, take the mouse to an Apple store or call Applecare and indicate you have a warranty issue. Apple does replace things under warranty at no cost (shipping paid both ways). I have had a mouse and keyboard replaced in the past and was pleased with the service.
Barry
Barry