Windows 7: keyboard & mouse lag in IE8

Recently I have been experiencing serious but intermittent keyboard lag, also lag when scrolling with mouse wheel, cursor competely freezing at times.
It seems to only occur with IE8. Closing the browser and reopening usually cures the problem - but only briefly before it starts again.
Anyone experienced this? I have run CCleaner, AVG, Spybot etc., all clear. Could the browser have a bug? I installed Live essentials a few days ago - can't remember whether the problem started before or not - could some element of this be corrupting the browser? (I disabled Windows Live Toolbar - no difference). Also just downloaded and installed latest Windows updates.
Any suggestions appreciated.

Have you tried reinstalling it?

Tools/options/advanced/reset.

Thanks for the replies, guys.
I haven't tried reinstalling, but if it comes to that, will I need to save my favorites/settings, and if so, what's the easiest way to do so?
I will try reset before reinstalling, but for now I have disabled all add-ons to see if that helps. hard to tell due to the intermittent nature of the problem - right now it's fine. Re-enabling add-ons to see if any make a difference.
Thanks again for your response, and I'll let you know how it goes.

You may have to back your favorites up. This is how you do it:
1. Click the File menu and Import and Export in Internet Explorer
2. Within the Import press export from a file i believe.
3. Click Favorites and click Next.
6. Select the destination you wish to save the favorites and click Next.
7. Press finish and you're done!

Hope this helps

Yes the Import/Export is a handy way to save favorites, feeds, and cookies or move them to/from other browsers. However a reset shouldn't wipe out the favorites folder.

I just noticed I have a favorites folder already (I didn't create it so I guess Windows 7 did it during a back-up or something?) so if I were to lose them, no problem restoring them.
The problem still hasn't reoccurred since disabling all add-ons, so I'm thinking it was one of them. I'm gradually re-enabling them, but there's a lot of clearly unnecessary ones which I'm ignoring, so I may never find out which it was.

Yes, Windows 7 has a Favorites already installed. I forgot about that lol.

No. Windows 7 comes with IE8 and with the Favorites folder built in to Windows Explorer (just like Music, Documents, etc.). Correct, you won't loose it during a reset.