I had the same problem with Win x64 and after some restarts i used http://www.satanion.dk/USBHz_Win7.rar and i did it exactly how it's described in the readme and it worked.
I've no idea why it didn't worked with the guides posted on ngohq.com.
well, the thing is tho that stuff like your reaction time + ping +monitor input lag + mouse input lag add up in a way that makes stuff more unpredictable
edit: and the fact you notice a difference between ping 20 and 50 and 100 alone makes me think that 8ms vs 2 ms is something that can make a difference
Yes, I agree that you can feel difference between 20, 50 and 100 milliseconds of ping, but I highly doubt that you can feel difference between, say, 226 and 220 ms of total lag (the first number is 125 hz mouse, the second number is with 500 hz mouse, reaction 160, ping 50, CRT hz 125).
As you can see, biggest point of concern should be working on reaction speed improvement and keeping pings low, hardware provided adequate level of performance years ago (unless you are having a really lagging TFT :).
its not so much the total delay that is the problem imo but moreso the deviation of the delay.
the 8ms delay is a maximum, it can be anything up to 8ms, same goes for monitor and keyboard input.
a constant ping of 50 is something you can adjust to very well.
but playing with something like an effective ping of 30-60, because your monitor has 20 something ms input lag and your other peripheral devices have some high input lag aswell might jsut mess up your game.