This doesn't really help in this case. It's not that the mouse isn't polled often enough; it's that the screen isn't redrawn fast enough. Interpolation won't help if the mouse position only updates 10 times per second.
If the frame drop is that large then I agree with you. However if the application is running that slow then its unlikely the other techniques mentioned above are going to help much and in general the application has serious issues which need to be addressed first.
For smaller frame drops though, mouse interpolation should work well enough.
Oh, that sounds pretty interesting
Though not perfect, it may be enough of a compromise. I'll probably give it a try. Do you have any examples of this or is this just idea from top of your head?
It's a technique used in many commerical games and triple A titles (sometimes you can even toggle it on/off in the options), IIRC (not 100% sure) it was also used in Revenge of the Titans
(OpenGL game with source code
I don't have a link to an article setting out the implementation, however the concepts at the end of the fix your game loop articles are pretty similar such as here