Arg, this is bugging the heck out of me!
I have Red Hat Fedora Core 2 and my mouse works fine from the shell. When I try to start X, it says that Mouse0 isnt working. I tried a USB and PS2 mouse, then I tried plugging the PS2 one into a PS2-serial thing and even that didn't work. When I try to run gdm, it tells me that "the x server cannot start because your mouse isn't configured right" and that I can run the mouse config program. I tried this in all of the mouse configurations, but that didn't work either. Anybody know what I'm missing here?? :(