if you run diablo 1 in aspect corrected stretch mode you'll have some bugginess with the mouse as you click and drag. My guess is that it uses the original 640x480 screen resolution to guess where the mouse is and draw the cursor which causes it to jump around the screen or vanish when you are clicking and dragging.
They same issues seem to happen in Warcraft II: Battle.net edition as well
its a storm engine thing, it happens on most of the wrappers better to just use uncorrected 640x480 and let the monitor or display adapter handle scaling.