I read through the sticky and the only thing that helped was disabling the directdraw acceleration.

The game now runs perfectly except the mouse cursor flicker rapidly. Its impossible to play when something like that is on the screen!

By now everyone should have computers with which IWD 2 cant run properly. And yet Im surprised to see that this issue is not raised much at all on the forums.

Basically, is there some other way to imrpove the performance(playing with the config did not work) or, if it is impossible, to stop the cursor from flickering?

It's not so much a performance issue as a compatibility issue. The problem may or may not appear regardless of how good your system is (mine's a few years old and I never had any problems). As such it's tricky finding a solution that'll work for everyone.

Have you tried setting acceleration to something intermediate? I've found with other games that turning it off completely does not resolve the issue, but setting it to one specific notch did the trick. I know it doesn't make any sense, but it's worth a try.