Glad it works well! Beta 1 mouse sensitivity didn't work all too well, so it's "fixed" in beta 2. But I guess it's not all that fixed if you're running into issues. Hmmm.
I'll have to look into sometime! But there wasn't any major changes between beta 1 and beta 2. Just the mouse stuff!
And if you have underwater problems try using dgvoodoo2. That should clean it up. It might slow down the game when you have your flashlight on though..
Enjoy!