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If the administrators block .dmg files, i highly doubt they'll allow you to run any applicaitons that haven't been installed via an administrator's password.

I've had odd issues like this and it's almost always a preference problem (I know it sounds out there, but trust me I've seen an issue almost exactly like this 3 times now). Try this. Create a new user on your system (Blue Apple -> System Preferences -> Accounts -> Plus sign (bottom left...

Not sure of a list of incompatability issues, however; you may want to try verison 5.4 of Microsoft's mouse software (http://www.microsoft.com/hardware/mouseandkeyboard/Download.mspx If not, you can still grab the 5.0 version at versiontrack...