I've just installed winXP SP2 on my syster's computer and during the setup her serial mouse worked just fine but after the setup was done it simply stopped working. The weirdest part os that you can move the mouse pointer on the "Welcome to Windows XP" screen (right after boot finishes) but when the desktop appears the mouse stops working again =/ I've already checked for conflicts or driver errors on the device manager but everything seems fine, what should I do?
I had simmilar problem, but my mouse used to stop working randomly, so it probably isn't the same as your problem, try othere mouse, and enable keyboard mouse (or sth like that, forgot its name). Maybe after loging some option turns off mouse...
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