
I actually came across this problem last week, when I was performing the FPS tests in our Creative PCI-E X-Fi Fatal1ty review. Running the game in a low resolution to take the video card out of the equation as much as possible, frame rates were in the 200 FPS range. I found the control to be so sluggish, turning the character around the corner took several sweeps across the desk. It was horrendous! I didn’t even want to test the game, let alone start playing it!
This of course, is pretty common knowledge. Many games ported from consoles to PC have similar problems. These problems can usually be fixed by adjusting visual settings – usually disabling Vsync, or enabling triple buffering. With Dead Space though, nothing fixed the laggy mouse controls.
Luckily, our friend Scott at Tech Report decided to do some investigation, and came up with the solution. As it turns out, the game is meant to be played at a locked 30 FPS, just like it would on XBOX 360 and Playstation 3. However, with Vsync on at 30 fps, not only is the framerate way too low (even somewhat modest PC configurations can run the game at a rate of at least 60 FPS with high settings), the mouse controls are extremely laggy. Disabling Vsync on many systems causes the framerate to go as high as it can – up to 200 fps on our GeForce 8800GT with Core 2 Duo. This also causes problems; if the frame rate gets too high, the mouse controls will not work properly.
Turning on Vsync in the game locks it at 30 FPS, but using your video card control panel to do so will lock it at your monitor’s actual rate (which for LCDs is of course 60 FPS). Unfortunately, ATI drivers do not currently have any effect on the game’s Vsync setting, so you will have to either find the right settings to keep the game running at around 60 fps steadily (nearly impossible, as it will inevitably reach lag-inducing framerates in small quarters, and corners), or just wait for a patch or an ATI driver update.
Also, the game menus will still be sluggish as hell, so until a patch is released it will probably remain that way. At least you’ll be able to play it properly now, thanks to this fix.

try d3d overider which comes with Rivatuner.. enabling vsync and triple buffer through this utility makes the game runs as it should.. try it and report.
I turned of V-sync and it was instantly fine. :/
Turning V-sync off only fixes the mouse on the menus. On aim mode it is still bad.
I don’t know about anyone else, but I had a PC Controller hooked to my computer and when I took it out, it stopped doing that. You can find that and other problem fixes here.
http://segmentnext.com/2011/01/25/dead-space-2-errors-crashes-freezes-and-save-fix/