SOLVED - TouchCheck fixed this for me
I have a Dell E6410, use the pointing stick only and have the trackpad turned off. I had exactly the problems discussed here...drove me nuts, just like everyone else with this problem.
I tried fixing it with "Enhance pointer precision" but it did nothing in my case. I tried various other pointer and trackpad setting in the ALPS/Dell Dell TouchPad software. Nothing helped until I checked the box for TouchCheck under pointing stick options. Checking that box corrected the problem, unchecking the box restored the problem.
Under the ? icon, it says TouchCheck "will help prevent unwanted pointer movement or clicks." It somehow desensitizes the pointing stick. Worked for me and I'm truly relieved.