Through careful experimentation I discovered:
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300×100 works in the main menu (but does not let you mouseover a small part of the screen on the right hand side) but not the character creation menu (this area widens significantly at the same measurements in the character creation menu)
MS Mouse corrects horizontal drift, but causes more severe vertical drift that prevents the cursor from reaching the bottom half of the screen.
Settlr1 causes the mouse to be fully offscreen.
Synd causes mouse drift to be far more wild and quick.
Synd+320×200 causes mouse drift to be worse on the main menu screen, almost fixes horizontal mouse drift on the character create screen, and makes the vertical mouse drift more severe.