My mouse acts very strange in the game, almost like it only updates the new position every 1-2 frames or something, it feels like it's very "skippy" and skips position when moved.

Did/do any of you guys have this issue and how did you solve it?

For some reason, the issue goes away when I turn on cursor/mouse shadow in battle mode.

WHICH game?

HOMM 3 - thought this was the homm 3 board no?

This is a board for all Heroes titles. It has "series" in the name.

Are you running the HD mod or the alternate renderer?

No I literally just installed it from GOG. Im running 64bit win10 if that helps.

Use either option, see if that changes the mouse issues.

I solved the mouse problem by downloading both HD mod and the Horn of the Abyss, that I can recommend Graphically, certainly the best looking version of HOMM 3. iWoG maybe solved it but I can't be too sure, as I got used to it.

You just need HD Mod / GLWrapper to fix this issue, no need to install HoTA.