1) For Windows 7 do as stated before, backup the game folder, uninstall, and run the game from the backup folder.
2) If you want to use the mouse or a joystick, select the option "Disable/Enable alternate controls" at the botton (with arrows on each side).
The mouse now works in game, but not in menus, only the keyboard works in game and in menus.
Also in the same screen there's a third column to configure your joystick (second column is the mouse, first is the keyboard), make sure you replace the "?" symbols with the new assignments from your joystick.
The game works, even if it is not easy to figure out at first.