Mouse freeze certainly used to be indicative of general problems - certainly back in Win 3.1 days. More recently I have found it rare to occur but if it does then I have found the whole system has locked up - probably not due to a mouse-specific fault either.
Is it PS2 or USB? Using an adaptor or not? Certainly check connections - also look for any fracture in the cable going into the mouse. A new mouse is well worth trying if this one is old as you say - and also check to see if there is a newer driver available. I change mouse every year due to hard useage.
