Time lag between mouse movement and cursor movement on Secondary display

Client has a toshiba satellite u200 series laptop, running two displays, one is the standard laptop screen and the other is 22" lcd display. The secondary display as the main display. She is using logitech wireless keyboard and mouse. The problem arises when she uses the mouse, there is lag of a second or so, between the mouse moving and the cursor moving on the screen, but there is no lag on the laptop monitor. I have tried using a wired mouse as well and this is causing the same problem. The problem arises, when due to the delay she clicks on the mouse buttons too many times, and it slows down her work. She is very irritated with this, cause this slows her down. I have contacted toshiba, they told me to download the display drivers, in the hope that it would resolve the issue. The recommended settings are 1024x768, but she uses the 1240x  1024. Is there anyway we can resolve the issue with the lag. I am presuming that the VGA on the notebook cant handle the larger screen thus the lag, but client is not willing to understand this.