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Magic mouse - certain items don't respond to click!

Update:10-11Source: network consolidation
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I've had no problem with my Magic Mouse ever - Model MB829/LLA
Am running Imac with OS 10.5.8.
Today I saw a Magic Mouse Software update listed in Software Updates and innocently
enough I chose to install it.
Upon restart the Mouse will click and select items, but there is no response to the
command invoked by that 'click'  - ON CERTAIN ITEMS.  Also it will click on and
allow drag and scroll down say, a pop up menu, but for example when i click on the
minimize or close button on a window, it may or may not respond -  The wired mouse
operates fine doing the same event.  The new "Mouse" preferences pane also gives
no option - at least that I can see- for choosing which "side" of the front end of the
mouse, if that makes any sense...-per screenshot.  THe wired old Gateway mouse
i'm using right now still works normally btw. Any help or idea of what i'm missing here?
Thus far, not an improvement.  Thanks!
Mike

The Best Answer

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Just adding another weird anomaly going on with it.  If I simply click on the finder window it displays this(screenshot below) dialogue box.
Now if i select one of the items it will perform the action of opening a new window but...for example, i can't DRAG anything to/from the
new window it opened...  or click/select certain items in this dialogue box.  There's no response...well it's varying with different commands.
Very very strange