You need to reinstall the Logitech mouse driver
in Vista compatability mode by right clicking on the file and choosing to install in Vista compatablity mode. I would uninstall the driver first and restart.
After you attempt this the first time there will be a long delay 10-15 seconds, at which point Windows will show you a prompt to reinstall using Windows compatablity mode, say yes to this prompt. After that Windows will reinstall those drivers
correctly. Everything will work properly after you do that.
I'm using the same driver and that was the only way to make it work correctly. It should also fix your Explorer crashing problem. This procecure has already worked on a bunch of other machines running Windows 7.