I worked around this issue with the following process:
Go to the "Add Bluetooth Device" window.
Right click the mouse you want to add and select properties.
Under Services tab select the "Drivers
for keyboards...etc" checkbox.
You should see windows 7 installing drivers for this device.
Close the "Add device window"...
Mouse should work...
It still does not act quite right when it becomes un-paired but at least it works...