Hello Ian,
I had a very similar problem after my upgrade to 10.7.4. I have a late 2009 MacBook.
After the upgrade, although the magic mouse connected successful, the cursor would simply not move. After a reset, it would seem to work for a couple of minutes (although with erractic behaviour) and then freeze.
I noticed the following entries in my kernel.log, repeating every 30 seconds:
May 10 22:58:37 MacBook-de-Filipe-Custodio kernel[0]: REQUIRE failure: inDataSize >= bytesToSend - file: /SourceCache/IOBluetoothFamily/IOBluetoothFamily-4050.4.11/Core/Family/HCI/IOBl uetoothHCIController.cpp:9905
May 10 22:58:44 MacBook-de-Filipe-Custodio kernel[0]: REQUIRE failure: destinationDevice != NULL - file: /SourceCache/IOBluetoothFamily/IOBluetoothFamily-4050.4.11/Core/Family/HCI/IOBl uetoothHCIController.cpp:9881
This led me to this old post:
https://discussions.apple.com/thread/3648225?start=0&tstart=0
I followed the steps in the post:
- Delete the mouse from bluetooth preferences
- Reset PRAM (SMC was not necessary)
- Reconnect the mouse
For me it worked! I hope it helps you too!
Best regards,
Filipe Custódio