Not sure if it's the same issue but similar things happend on a fresh 
ubuntu-10.10-desktop-amd64 installation with an ATI Radeon HD 4800 (fglrx):
When using a multimedia app like me-tv, vlc or totem the left mouse button 
doesn't work anymore after some time. Sometimes the icon for dragging appeared 
constantly besides the mouse pointer. The right button still worked but I had 
to restart gdm to get all mouse buttons working again. I first thought it's 
because of compiz 3D-effects but it also happended when disabling them.
It just also happened when using rhythmbox so this issue might be also related 
to  #658303.
I dindn't have this problems with ubuntu 10.04.

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Mouse buttons stop working, then disappear
https://bugs.launchpad.net/bugs/658122
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