I figured it out. It was the fact that i was using a usb mouse. A trackball to be exact. Anyway I plugged in an old ps2 mouse and just left it sitting on the back of the pc and everything works great. The trackball works fine it, just was not being detected by the direct input and caused the error messages. I also got the direct input messages but figured it was a problem with directx. turns out it just could not find the mouse.
Thanks for the help,
Mike