Thanks Jacob, I will check it out.
OK, so this is weird. Illustrator CS3 is doing the same thing! I tried another mouse (grasping at straws), and it's still there. So it isn't a specific document, it isn't a specific version of Illustrator, and it isn't a specific input device. Totally stumped here.
OK, figured it out. In case anyone else runs across this...
A week ago I installed a window management utility called "Cinch." (http://www.irradiatedsoftware.com/cinch/) It's a cool, simple app that causes windows to fill half the screen when you drag them off the side of your monitor. Good for working with 2 documents side-by-side.
But... it apparently causes this weirdness with Illustrator. Everything else works perfectly ... such an odd thing.
Thank you for getting back to us with this, Scott.