A pointing device is provided for reporting motion information about the pointing device. Counts representing movement in two dimensions are processed so that a packet data stream may accommodate the motion information. One aspect of the invention utilizes the value of count to determine whether compression of the motion information should be performed. When it is determined that compression should be performed, a compression function is selected, the count is processed by the compression function, and an indicator is set to indicate that the count is processed by the compression function. Reporting information, which includes the processed count and the indicator, is then transmitted to computer system. A user input interface that is associated with the computer system recovers the counts using appropriate inverse functions in accordance with the indicators.