"Is it just for show with your computer or do you need it for some games? Just asking!"
It isn't just for show, many games play much better with the mouse than they did with the standard PS controller due to the enourmous menus and options you had during play. It is a tremendous help not only for speed, but playability. Here's a quick list I found of games that supported the PS Mouse.
Arcade's Greatest Hits: Atari Coll. 2
Arcade's Greatest Hits: Atari Coll. 1
Die Hard Trilogy
Clock Tower Oct 10, 97 Adventure
X-COM: UFO Defense
Discworld II: Mortality Bytes!
Command & Conquer: Red Alert
C & C: Red Alert Retaliation
Project: Horned Owl
There are others, these are all i found in a quick search. One that comes to mind is Romance of the Three Kingdoms VI, coincidentally, this is the game I am trying to use it on, to no evail.
"Under CONFIG--->GAMEPAD--->PAD 1, you can actually use the Mouse by selecting the drop-box on the upper-right hand corner.
I haven tested this function, so I cannot be sure whether this is possible."
I have tried every setting that lists mouse in epsxe 1.60 and have yet to get it to work, if anyone has or knows how to make this work, please leave info of the game it works in, and how you did it.