After posting this, I thought "did I give Bluetooth on this mouse enough of a chance, after all I gave up three minutes after enabling Bluetooth, maybe I should try again". It certainly would be useful to be able to use Bluetooth and leave the dongle on the shelf.

So I did, I've been using Bluetooth for the last couple of days. Initially it was fine, couldn't really tell a difference between it and the dongle connection. But today it is back to its bad old behaviour, laggy so that the pointer doesn't track 100% smoothly across the screen.

I suspect less picky users would never notice (like those people who couldn't spot flickering CRTs and never cleaned their mouse balls). But it is horrible to use when it starts lagging. So, I'm back to the lag free dongle again.