Do you have another mouse you could plug in to see if it's hardware related? And sometimes I've seen that with optical mice on certain surfaces...you could try skipping the mouse pad or using a different one for a bit.
Hmmm....lemme see if I have another mouse that's in working order around here.
BTW, it's a serial mouse. I's on thelaptop and I've got a real keyboard plugged into the PS2 mouse port.