I recently hooked up my Desktop pc (I7 920, XFX 5870, W7 pro) to my Sony WL140 tv via hdmi. Some games worked great (Borderlands, Mass Effect 2, Singularity) but 2 games were giving me issues: Battlefield Bad Company 2 & Crysis Warhead. The problem occurred in the game's menu. I could not navigate the menu (or just barely) because the mouse cursor did not line up with the input on the screen. To select anything on the menu, I had to click several inches below and to the right of the setting.
This had been driving me nuts for the past 2 days. After trying many, many things (different screen, change drivers, tweaks, etc etc) I finally found the issue: my dpi setting in windows. It was set to 150% because I found txt on the screen to be too small. After reading up a bit on various issues, I figured I'd change the DPI setting and BINGO, everything works as it should. I decided to post this in case anyone else is having the same issue! Hope this helps someone else out.