About 1 or 2 times in a minute the mouse cursor resets its position to the nearest corner of the screen if I am moving the mouse.

The syslog contains nothing interesting, or any error message.
--- Begin /etc/init.d/gpm (modified conffile)
#!/bin/sh
PIDFILE=/var/run/gpm.pid
GPM=/usr/sbin/gpm
CFG=/etc/gpm.conf
test -x $GPM || exit 0
if [ "$(id -u)" != "0" ]
then
  echo "You must be root to start, stop or restart gpm."
  exit 1
fi

cmdln=
if [ -f $CFG ]; then
  . $CFG
  if [ -n "$device" ]; then cmdln="$cmdln -m $device"; fi
  if [ -n "$type" ]; then cmdln="$cmdln -t $type"; fi
  if [ -n "$responsiveness" ]; then cmdln="$cmdln -r $responsiveness"; fi
  if [ -n "$sample_rate" ]; then cmdln="$cmdln -s $sample_rate"; fi
  if [ -n "$repeat_type" ]; then cmdln="$cmdln -R$repeat_type"; fi
  # Yes, this /IS/ correct! There is no space after -R!!!!!!
  # I reserve the right to throw manpages at anyone who disagrees.
  if [ -n "$append" ]; then cmdln="$cmdln $append"; fi
fi
gpm_strace () {
  echo -n "Running mouse interface server under strace: gpm"
  strace -T -o /root/gpm.strace $GPM -V -D -e $cmdln > /root/gpm.out 2>&1
  echo "."
  return 0
}
gpm_start () {
  echo -n "Starting mouse interface server: gpm"
  start-stop-daemon --start --quiet --exec $GPM -- $cmdln
  echo "."
  return 0
}
gpm_stop () {
  echo -n "Stopping mouse interface server: gpm"
  $GPM -k
  echo "."
}
case "$1" in
  strace)
     gpm_strace
     ;;
  start)
     gpm_start
     ;;
  stop)
     gpm_stop
     ;;
  force-reload|restart)
     gpm_stop
     sleep 3
     gpm_start
     ;;
  *)
     echo "Usage: /etc/init.d/gpm {start|stop|restart|force-reload|strace}"
     exit 1
esac
exit 0

--- End /etc/init.d/gpm