As this is the newest one, I'll reply here.
I believe what you're looking for is 'mouselook' if I remember right (maybe someone will correct me), and you can find the setting to turn it on or off, as well as bind something to toggling the mouselook/target cursor (the arrow) so you can point and click things.
Now as to the whole (the game what's name shall not be mentioned) way of running, which is what I believe you've described... that's turning run on and off, or simply hitting the 'W' key. I'm not a fan of the two-mouse-button moving, pretty much why (the game what's name shall not be mention) turned me off: I got a hand cramp moving about that thing.
But that's me. We're talking about you and your wants and desires. All that you want to do is in the options. You simply have to set it up the way you want, and that, unfornately, is a trial and error thing you have to go through.
August 31, 2012. A Day that will Live in Infamy. Or Information. Possibly Influence. Well, Inf, anyway. Thank you, Paragon Studios, for what you did, and the enjoyment and camaraderie you brought.
This is houtex, aka Mike, signing off the forums. G'night all. - 10/26/2012
Well... perhaps I was premature about that whole 'signing off' thing... - 11-9-2012
when i use my mouse to walk/run after i release both mouse buttons my hero keeps walking/running is there a way to stop this it is very annoying i find it much easier to move around by pressing both mouse buttons and just moving the mouse in direction i want to go and do not want to use point and click movement