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?? :(

Try running the xconfig files again (the automagic ones).

It may set it up correctly. Did it work during the install (did you do a gui install?)

Tell us the exact makes/models of the meeces you've tried. Also post the contents of the "Input Devices" section of your /etc/X11/xorg.conf and
/etc/X11/XF86Config files.

ya know.. I'm getting a bit of "Double Version" here..

smart move staying in runlevel 3 by default though, makes troubleshooting
from the command line sooooooo much easier.

In Redhat from the command line..

(or within the hierarchy of /etc/inet.d/* there should be something similar.)

should get you a generic tab, space and arrows config interface
for what you've got.. then select away test and exit.

just a thought though..