I have 2 S300WI. but ONE has similar problem:

If PEN  putting in the screen center is OK, but move to left or right then the cursor is different to the NIB cordinator.

I intend to look for the manual for how to calibrate the unit, or set up a new machine to test with the pen again. I did reset the FACTORY-SETTING to start from biginning. If you find solution, please email me on <ADMIN NOTE:Email Id removed per privacy policy>

Try FACTORY SETUP, and then connect to your PC (check PC resolution). My system did not work the first time in school.

After my first reply to your message, I connected to my third laptop at home: the pen-nip and the screen solution are OK.

I tested again with TWO previous laptops, and with other S300WI as well (I mentioned in previous reply, I have 2 unit)

* * * * FACTORY SETUP had solved my other problem before: One of my unit refused to recorgise PEN in VGA mode ( WIRELESS in OK, but too lagging to be used). I got though many option without success until FACTORY SETUP was used.

Using DELL S300WI and a homemade screen, I submitted a eInstruction Video Makeover Contest. See for yourself from following link: http://2010classroommakeover.shycast.com/submission/show/852

Thehe, you seem to be a little bit of an expert on this.  Here is what I have done.  I'm using the projector wirelessly.  In interactive mode, the screen on the projector freezes, and the cursor doesn't move.  The cursor does move on my computer screen.  Also, the mouse function of the pen doesn't work.  Could you send pictures of your setup.  Is it possible for me to use this machine with the interactive pen wirelessly?  

On SETUP menu : Wireless Network is ON (ON with orange color)

On OTHER menu: Interactive is ON  (ON with orange color)

On INFORMATION  menu: the IP address will show: 192.168.100.10

When connect to DELL wireless: under LOG IN window will display another window with

IP address, Username and LOGIN CODE: (enter the login code display on the projector screen)

Do not select INTERACTIVE PEN ONLY (left it blank in UN-checked mode)

The next window will have 1, 2, 3, 4 number surrounding a PLAY button.

Select PLAY button  then PROMPT SCREEN will be replaced by your laptop screen.

If your laptop and the projector are connect with the USB CABLE then you can use the PEN.

If you cannot move your mouse on the laptop screen: try to hide the PEN out of active area ( put the pen far away to your left or right for ex.

in my case if INTERACTIVE PEN ONLY is check then the computer mouse will be frozen. I had to force closing my laptop to reboot the machine.

If you were  messing with the set up then come back to OTHER menu for FACTORY RESET option.