High-frequency periodic timers keep the processor continually busy, which prevents the system from remaining in a lower power state for any meaningful amount of time. This can have a negative impact on portable computer battery life and scenarios that depend on effective power management, such as large datacenters.
Exactly my point - so why would they make only the waitable timers high-performance, then? Everyone (mostly game developers) would just start using them, and that would defeat the purpose of that MSDN warning. Not that you can't use timeBeginPeriod(1), of course, but that's what the warning is for in the first place.
Windows would be slow as hell if there was no alternative. When you call WaitMessage() it internally performs the same kind of waiting, and if it was only as low as the system resolution your mouse would be jittery as hell.
The system timer has nothing to do with the mouse, or any other bus-connected device. Devices have their own interrupt that signal the CPU when a hardware event happens, and it all happens separately from the system timer's programmable interrupt, which only signals the CPU periodically. So, WaitMessage will return when either the timeout expires (as timed by the system-timer), or when a device-driver responds to a hardware interrupt event, and creates an input event from it (and so on)...
I still say that the waitable timers are just software timers backed by the system timer - in which case, the only way to increase their resolution would be to increase the system timer resolution.