Okay hi all thanks all for feedback I have readjusted to summarize the problem
Any new info is helpful
Ps thanks to ste4lth004 for dragging up the quote by 83upwi on the nvidia fix
Summery of problem (That I have been able to garner together)
1) Lower frame rates aggravates it (it is not frame rate dependent)
2) Appears that v-sync and/or mouse smoothing could be part of the problem
3) It is NOT the float zone
4) It is NOT hardware related
5) happens on all os systems (win7, xp and vista)
What may help
1) Download ati tray tools at guru3d and try forcing v-sync off
2) Using above ati tools to change the set maximum pre-rendered frames to 1 or 0
2.1 if you have nvidia Right click desktop, -> Nvidia Control Panel, Manage 3D Settings, Program Settings. Click Add, browse to the Arma2.exe file, scroll down and select "Force Off" for the Vsync option. Hit apply. Done.
3) Disable post processing in game
4) Raised the mouse DPI and lowered the ingame sensitivity
5) Increasing you fps by lowering your ingame settings and view distance