Ok, so I was having problems with my mouse as outlined below. I noticed a fair few number of other people were also having this problem. If it's TL:DR, just skip to the bottom.

Problems:

• Mouse was too fast ingame (even with sensitivity on 0 on the slider)
  
• Changing m_sensitivity through console/launch options did nothing (it was locked to 5)
  
• Mouse was EXTREMELY slow in game menus/TAB menu... I could barely move my mouse to accept quests/start game etc.

Below are two methods of applying these fixes, either through a desktop short-cut or steam itself. Choose whichever applies to you (or both )

Solutions
Desktop short-cut:

• Right click the Rage short-cut
  
• Click properties
  
• In the target box go to the end of the talking marks ("), add a space and then add +m_yaw xxx +m_pitch xxx + m_menu_sensitivity xxx
  
• *OPTIONAL* - but suggested - grab a beer.. or 12!
  
• Launch!

Through Steam:

• Right click Rage in Steam
  
• Click properties
  
• Click set launch options
  
• Add +m_yaw xxx +m_pitch xxx +m_menu_sensitivity xxx commands in the box
  
• *OPTIONAL* - but suggested - grab a beer.. or 12!
  
• Launch!

N.B.: xxx is replaced with numerical values as explained below. I also recommend adding +m_smooth 0 to disable mouse acceleration in-game (try it with 1 or 0, see what you like).

The default m_yaw and m_pitch is 0.022.

• LOWERING m_yaw DECREASES x sensitivity - ie 0.011 is half the normal x/horizontal sensitivity. Raising this value will result in higher x sensitivities.
  
• LOWERING m_pitch DECREASES y sensitivity - ie 0.011 is half the normal y/vertical sensitivity. Raising this value will result in higher y sensitivities.

The default m_menu_sensitivity is 0.35.

• I started with m_menu_sensitivity 1 - the problem was alleviated but it was still too slow
  
• I then progressively raised it until I just got fed up and put 50 there. It nows feels ALOT better but still a little laggy
  
• m_menu_sensitivity above 0.35 seems to fixes the slow mouse in menus (tweak upwards)

I would recommend changing these, testing them, exiting out (unless it's done through console) and retesting until you arrive and your perfect settings.

For me I use an extremely low sensitivity (44.4cm=180degrees in-game) with low DPI (450) so I believe the people having this issue have their sensitivity slider very low/off which causes the in game menu mouse problems (and for me it was still too sensitive in-game. On top of this the console variables (CVARs) for m_sensitivity appear to be locked. I am using +m_yaw 0.014 +m_pitch 0.014 +m_menu_sensitivity 50. I also recommend adding +m_smooth 0 to disable mouse acceleration ingame.

All these settings can also be set through console and alleviate the need to exit and re-enter the game - please be aware that by enabling console you can bug out your game resulting in disabled achievements (it was the messages that annoyed me, not the lack of achievements.)

Hope this helps everyone who is having mice issues with Rage


TL:DR version:
Add these to your launch options:
+m_yaw 0.014 +m_pitch 0.014 +m_menu_sensitivity 50

• Decreasing m_yaw=decreased x/horizontal sensitivity
  
• Decreasing m_pitch=decreased y/vertical sensitivity
  
• The inverse of these values increases the according sensitivity
  
• m_menu_sensitivity above 0.35 fixes the slow mouse in menus (tweak upwards)

There are some problems with this fix. For one thing, we can't adjust m_menu_sensitivity anymore. The variable is locked in the latest patch. Even when we had access to the variable, it only affected the cursor in the inventory menu.

Second, m_smooth doesn't really do anything. If it is set to 0, it is disabled. When set to 1, it's technically on, but it doesn't so anything. Set it higher than one and it will start smoothing together multiple mouse samples, which you will be able to feel while playing. It doesn't have anything to do with acceleration, though.

The root of the problem is that the on-screen mouse cursor is being processed as gamepad input. Every kind of processing that gets applied to gamepads is active. That means acceleration, smoothing, dead zones, and angle snapping. The game needs to be patched to fix this.

I am using the latest patch for this. I am aware that m_smooth when set to 0 was still defaulting to 1 in console. I personally left it at 0 for... well just call it placebo... or even paranoia . I guess your right in that I shouldn't be advocating a placebo... but I digress, that is delving much too deep into philosophy for my liking atm!

As for angle snapping/prediction, I didn't notice any of this when I just jumped in game then. However, the mouse in this game feels VERY sluggish/laggy/non-responsive to me (even if the sensitivity is now fine)... it's kinda feels like I'm dragging a dead elephant around with my cursor :S

The problem only happens when you're controlling an on-screen cursor. It's more/less noticeable depending on your sensitivity settings.

They should add raw mouse input (in_mouse 2) like Quake Live has.

Ah yes then that is true, angle snapping is still enabled in the in game menus. However, for me, drastically raising m_mouse_sensitivity relieved the snapping feeling IMMENSELY... it is now somewhat smooth and more than playable.

Yes a raw mouse input would be perfect! Hopefully it will be added in time