Morrowind GOTY Mouse Problems

I just re-installed it after about a year or so of dying of boredom. But when I'm playing, if I move my mouse too much I can see it appear on the edges of my screen and if I click, Morrowind, minimizes. It's getting really annoying. I'm running it at full graphics, 1280x960 on an Nvidia 8500 GT. Anyone know a fix?

Is it windowed and set to your screen resolution?MTBare

I have my screens resolution is at it's native which is 1280x1024. I don't think it's windowed.