grin I think you found it! At least, it is better than my previous code. Perhaps smoothing the rotation will make it look beter.

Code:
#include <acknex.h>
#include <default.c>
#include <camera.c>

// Ray radius
var ray_radius = 20 ;

FONT *fnt_arial = "Arial#14" ;

var force_x = 0 ;
var force_y = 0 ;
PANEL *pan_mouseForce = 
{
	digits ( 0, 0, "mouse_force.x = %0.2f", fnt_arial, 1, force_x ) ;	
	digits ( 0, 10, "mouse_force.y = %0.2f", fnt_arial, 1, force_y ) ;
	
	flags = SHOW ;	
}

VECTOR vec_mouse;
VECTOR temp;

void main()
{
	video_mode = 4;
	mouse_mode = 4;
	mouse_pointer = 0;
	level_load("");
	ENTITY *ent_player = ent_create("cube.mdl",nullvector,NULL);
	camera.tilt = -90 ;
	set(camera,ISOMETRIC);
	vec_set(camera.x,ent_player.x);
	camera.z += 20;
	camera.arc = 10 ;
	
	while(1)
	{
		vec_set(&vec_mouse,mouse_pos);
		vec_for_screen(&vec_mouse,camera);
		vec_diff(temp,vec_mouse.x,ent_player.x);		
		vec_normalize(temp,100);	
		vec_add(temp,ent_player.x);
		vec_sub(&vec_mouse,ent_player.x) ;
		ent_player.pan = atan2v(vec_mouse.y,vec_mouse.x);
		wait(1);
	}
}