for your mouse behaving erratic, i would try to test whether your ps/2 mouse port is the cause of your problem. test using a serial mouse on the serial port. i beleive you have some grounding issue with the mouse. i have never experienced this problem before so my advice is limited.
your second "problem" is because winXP creates a account with the username administrator. when winXP is installed it asks for the password to create the administrator account.
this account is hidden by default, it can be accessed from safe mode. this is what you are seeing. you need to ask whoever installed winXP to give you the password. otherwise you can log into any other account which has administrative access.
if the account you usually use has administrative access you can use that account instead. someone had posted a link to a site about a password reset disk. i cannot seem to find this thread.