After investigating this issue, some people say its a screensaver issue, which others say you need to disable the gestures which came with mountain lion. Both of these do not help solve the issue.
How to re-enable three finger swipe to move between full screen applicationsHowever I found in the extra gestures settings that Mountain Lion changes three finger swiping for four finger swiping across multiple open full screen programs, its a very simple fix.
How to re-enable three finger swipe gestures
- Go to System Preferences
- Go to Trackpad
- Click on "More Gestures"
- In "Swipe between full screen apps" change the setting to "Swipe left or right with three fingers"