Assuming /dev/mouse --> /dev/psaux, it might actually be a window manager problem. Do you use xdm (or an equivalent) and do you see a cursor there (the good ol' X cursor)? Are you running "unclutter"? It hides the cursor after a specified amount of time if it's over a window (very nice actually). You might try running just X without a window manager. It should give you that horrible gray stipple pattern with a big X cursor that you should be able to move around (make sure xdm is not running when you try this and use Ctrl-Alt-<Backspace> to kill it).
Hmmm, very odd. -- ¶ One·should·only·use·the·ASCII·characterset·when·compos » ing·email·messages.