EnableCursorSuppression didn't fix it.

Following your second guess, I have three mice in Device Manager: "ELAN Input Device" by ELAN and two times "HID-compliant mouse" by MS (hid-0B05/pid-17FD &...

Yes, thanks. The scaling is changing but the problem remains.

Is there a way to reset all desktop (scale) settings?

Changing resolution doesn't fix the problem.

F5 fixed it for a while, but if I keep moving around the mouse, the problem appears gradually. At first the displacement is smaller and it keeps...

It only happens with desktop icons. Everywhere else it is working ok.
No problem to select text, use a browser, Windows Explorer or anything else.

Anyone?

I got the Anniversary Update a month or two back. And ever since I have this problem on desktop icons.
The mouse hover selection is shifted away from cursor, in a way that the next icon is selected,...

Yeah, I'm not looking for a solution anymore. I agree that reinstall is probably the only real fix.

No, I've renamed it prior its activation.

If you check back, I was actually able to switch to MS account, but unable to go back to local.
That's the weird thing - it's the opposite of what should be happening :)

I have an idea, about the anomalies I've described earlier. I just remembered that before the upgrade, in Win7 I was using the built-in admin account (SID: 500). So after the upgrade to Win10 the...

I just installed it yesterday from the free offer.
The upgrade was failing in the Windows Update log, so I had to apply "AllowOSUpgrade" registry key. And then I forced the upgrade.

http://i.imgur.com/vITv1qd.png

Windows 10 Pro x64 v.10.0.10240, from Windows Update.

Yeah, you're right - I can create new local account. But I prefer to dig some more first :)
The "User account" tutorial starts from "Family & other users". It is only "Other users" in my screenshot....

The "Sign in with local account..." option is missing for me (7 Ultimate to 10 Pro).
Is there a reason for this?

http://i.imgur.com/vtIax0O.png