I'm intrigued by this. So, are you saying that switching the "Pointer Speed" in the Control Panel/Mouse settings actually just causes it to jump pixels? I haven't noticed any decrease in precision since I upped mine to the max, but I may just not be noticing it for whatever reason.
What other mouse acceleration are you referring to?
Thanks!
Assume you've got a basic mouse with no adjustable dpi. It's queried 100 times a second and returns it's current position.
If you move it an inch up/down/left/right then if it's 1600 dpi it'll report it's moved by 1600 dots, while if it's 400 dpi it'll report it's moved by 400 dots.
Now on the default pointer speed setting one dot = one pixel. If you know the dpi of your mouse then moving it an inch should move it that many pixels on the screen.
But there dots are the only unit the mouse can count in. If you want to have the cursor move 3,200 pixels per inch of mouse mousement then you can't move a pixel every half-dot because the mouse isn't reporting half-dots. Instead you have to move two pixels for every dot, and thus the smallest movement you can make is two pixels.
When decreasing the pointer speed the same thing happens, but it's less noticible this time since you're ignoring dots. You may find that some small movements won't register (or in extreme cases all your movements have to be bigger before they'll register) but the pointer will traverse every pixel.
Mouse acceleration is something different. The above 'normal' system only measures the position of the mouse, it doesn't care about the speed.
Mouse acceleration uses that speed data to adjust the sensitivity of the of the mouse so you cover many dots per inch when you're moving fast but only covers a few pixels per inch when you're moving slowly.
While it's a good idea the main issue with it is that it's more difficult to judge the changing mouse behavior quickly so many people who player reaction-based games (including me) prefer to turn it off.
I believe mouse acceleration is now called 'enhance pointer precision' in vista.
Of course, this is just the basics. There are lots of aberrations that can creep in like negative acceleration and the limitations on fast movements for some types of sensor. You'd have to ask on a mouse geek forum for those details though.