PROBLEM: I have had the same erratic mouse touchpad issue with my Dell Inspiron 1525. Running Widows Vista with Touchpad driver 7.1.1500.2.
SOLUTION: The touchpad has been working normally since I restored all of its settings to default (including turning the annoying scrolling and double click features back on).
Go into Control Panel > Mouse > Click to change touchpad settings> go into each of the four setting windows and click "Default" button.
Hope it works for you as well.