[SOLVED] Problem with power supply - Voltage drop

Heater current shouldn't run over the same 12volt/GND wires as the Arduino/sensor.
So how/where did you connect heater supply and heater ground (source of fet).

Conputer supplies are AFAIK only regulated on the 5volt line.
The 12volt outputs are just a secondary supply tap.
Have a look at the voltage drop on the 5volt output of that supply.
It might be better to power the Arduino with 5volt directly (hacked USB lead).
Leo..

Edit:
int ms = millis(); // all millis() related values should be unsigned long