i cannot take credit for this fix. i made a youtube video of my problem and a guy commented on the fix method, worked for me, so hope it works for you

Look in to your skyrim.ini or skyrimprefs.ini and? if you see something like
fMouseHeadingYScale=
fMouseHeadingXScale=
then delete it.

pretty sure this was fixed with 1.3, and can also be 'helped' by disabling presetinterval and forcing a 60fps limit through the video card settings.

That does not fix the issue... it simply returns the settings back to internal defaults... Which, for many of us, is out-of-whack...

If you only use the two settings in the "Skyrim.ini", it works fine, with values like this...
(Having the settings in "SkyrimPrefs.ini" is WRONG, and will mess-up the game.)

[Controls]
fMouseHeadingYScale=0.4800
fMouseHeadingXScale=0.0180

The PROBLEM is that they messed-up the Y scale. Previously both values were 0.0180, but since the "fix", the Y value has to be around 0.5000 Just adjust to taste, once it works again. If you don't like it, remove the settings and deal with hyper-y movement and slow X movement. (The default settings if removed, are too fast on Y and too slow on X, drawing a tall rectangle, as opposed to a wide rectangle, which is what you want in a game. You look less up and down, and look faster left and right. It is backwards with default settings.)

Mine is totally hooped after the patch. Hope this works. How on earth did that get missed in testing?

i dunno, my y axis has always been just fine for me, but i do have a 5k dpi mouse

In testing, they didn't use those commands in the INI file we have. The game has internal default INI settings built-in. When they adjusted the code for reduced lag, (Lag created by the mouse being tied improperly to the v-sync...), they actually broke it, and probably adjusted that internal Y setting to 0.5000 and X to 0.0200 to fix the "new code"... Reducing it to 0.4800 and 0.0180 places it back to the correct screen ratio of most other games. Just a tweak they figured wasn't important, since they are still focusing on the console, but it worked, so that general setting was "good-enough".)

I wouldn't mess with presetInterval... that IS NOT v-sync... that is internal game time stuff... Plus v-sync...
If you disable game-stuff, but then turn on v-sync... you just break the game stuff, and gain nothing...

You have that reverse... if anything... Leave presetInterval, and disable v-sync in your video-card. (Though that will still mess things up.)

The biggest mouse-killers are these settings...
In the "SkyrimPrefs.ini"

Set these values...

[Imagespace]
bDoDepthOfField=0
iRadialBlurLevel=0

That is the MENU BLUR which is killing your mouse.

sweet thanks JD.. ive changed the settings to what you've recommended in your first post, and it works nicely. you kind of lost me with the rest of your posts tho ahaha

I had to add those two entries to my .ini file to get my mouse to behave correctly in 1.1, and I had to remove them to get it to work in 1.2. Go figure.