I can confirm that same hardware/software setup is working fine here. I'm pretty sure updating your device means it was updating your drivers, logitech just tends to say that in their installers. Mouseware for these devices hasn't been updated in ages, so odds are you're using the same version you always have. If you think its the fault of the drivers just uninstall them.

i thought it did some type of firmware update..
i mean the mouse has worked fine for ages and ages .. years!! what are the odds it just happened to die
right after i install the mouseware app

An old mouse dying? Not surprising at all really. But like i said, there have been no updates to mouseware in forever so there is nothing to firmware update even if there was one, which there is still no proof of. Uninstall and install mouseware again, and it'll say the same "Updating your device" stuff, when it obviously shouldn't have to because its supposedly already updated.

could it have something to do with disabling "legacy usb support" in the bios?

Looking at the readme.txt of mouseware, it doesn't mention one thing about firmware updating. Though it did have this one thing related to your issue:

3.7 Scrolling/wheel related issues
If your mouse is equipped with a wheel and the wheel does not scroll, verify that the Logitech control panel is installed properly. If you click the Start button and select Settings, Control Panel, the mouse icon should bring up a Logitech control panel. Otherwise reinstall MouseWare.