The behavior of the mouse would be identical with or without ISBoxer (as you've discovered). I know of several people that play LOTRO using IS and ISBoxer, and this is the first I've heard of this particular issue. I'm thinking it could be related to a LOTRO option, but I don't know which one. I assume you have the game itself in Windowed Mode, and haven't used the "Force Windowed" option in Inner Space, correct? (If you didn't know this option existed, then the answer is yes and dont worry about it).

I don't THINK it would be related to your mouse, but you could obviously try a different one to be sure. If it is, then it's probably something to do with the Razer software.

p.s. As far as I know, you can have multiple LOTRO clients running without additional software.