I currently dual boot Windows 7 Ultimate and Windows Xp Professional. I work in 7 but I still play in XP. And the reason is input lag with Vsync turned ON. The problem is pretty notorious by now.
While frame rates are high these days if you spend some bucks, the new version of Windows adds tons of mouse lag to games. And while I can run Skyrim or QuakeLive in XP and benefit from 0 mouse latency I cannot run Battlefield 3 as it is a Windows 7 only game - hence I'm stuck with mouse lag.
Recently I found this guy who runs the kegetys.net website that wrote a nifty d3d wrapper (I guess :) by which you can enforce 2 settings pertaining to the input lag issue on any d3d application.
// which basically equates to the "Render ahead" setting in your Nvidia Control Panel
// which is the interesting part and sets a cap on your FPS. Try and set it a little lower than your monitor refresh rate as this is the key to drastically reducing lag. Do not go too low as you're going to get stuttering. Try and find a sweetspot.
Do not forget to force Vsync ON from the graphics card control panel.
While this will not make Windows 7 quite as responsive as XP it will improve you experience by a large margin.
Download below, copy to application folder(Ex. Skyrim folder), edit the .cfg file, run your game.