For the lockups, it looks like it was both PAE & a memory issue. I had 512 Mb assigned, once I bumped it to 1Gb and enabled PAE the problem went away.
Regarding the mouse issue, in Virtualbox (system -> motherboard), if I have "Enable absolute pointing device" checked, the scroll wheel does not work. I am able to move the mouse between the VM and the host OS without having to press the "Host Key" to release the mouse. Once I un-check this option, the scroll wheel starts working but I now have to press the "Host Key" to release the mouse back to the host OS. Not sure the difference, but with WC v16 this was not an issue with the absolute pointing device option checked.
The reason I'd like the guest additions installed:
1) It should solve the mouse issue
2) Copy/paste (I'd like to copy URL's from my host OS into WC)
3) Higher resolution (currently the system is limited to 1024x768)
Thank you for the help.