|That appears to be part of MS's intellipoint software. If you have the intellipoint disk that must have come with the mouse then try reinstalling the software.|
You could take a look at "mice and other pointing devices" in device manager and choose to rollback or uninstall the drivers if it was working OK previously.
To copy that single file to your system it's best and maybe necessary to use the one that came with the intellipoint software version you're currently using. If you didn't install any then a full install of any xp-compatible version should work.
This should be the link to the oldest compatible version:
You can scroll down that page for links to other versions.