Well, I contacted Happ and told them of my problems. They blamed my delay on the fact that the computer I had was running Windows Vista. Then, I hooked up the trackball to a computer that was running XP and I was able to duplicate the problem. Happ then said that the USB version of the trackballs don't process the information as quickly as the ones that run through encoders due to a board that is installed which they have no control over. So, I ended up ordering another trackball and I plan to hook it up through my Hagstrom and see what happens. The trackball should be here any day, so I will post with the results. After reading the thread in the post before this, I'm not too hopeful.
I should note that this is the 7th Happ trackball I have installed in 7 different mame cabinets and I have never seen this issue. Previously the configuration was Happ Trackball/Ultimarc encoder for the 1st four cabs. Then Happ Trackball/Hagstrom encoder for the next two. Then Happ USB trackball/Hagstom for the last one and that's when all the problems started. To be continued.......