What is happening to you has happened to me a lot. First thing is that it is probable that /dev/input/mice has nothing to do with anything. I have that too and it is not used. Even more fun is that with modern kernels and xorg, not even a really modern xorg, you dont need a file xorg.conf. My Xorg.0.log says (==) Using config file: "/etc/X11/xorg.conf" but it is == a default setting I removed the xorg.conf file. It seems to do a lot better without it and it saves a lot of effort making it.
The really important thing is to make sure that you have the correct driver in your kernel and if a module that it is loaded. includng the event stuff. All the kernel Input items especially the mouse items.
i did "lsmod" and it ouputs nothing :-( even i have to do "modprobe via-rhine" to make my "eth0" work. what could be the name of the "mouse module". i have Logitech PS/2 mouse running on ASUS K8V-MX motherboard?
your lines in Xorg.o.log(II) XINPUT: Adding extended input device "Mouse0" (type: MOUSE) (--) Mouse0: PnP-detected protocol: "ExplorerPS/2" (II) Mouse0: ps2EnableDataReporting: succeeded look pretty good.
they look pretyy good but they do no good :-( becuase whatever the LOG says is not solving my problem. -- arnuld http://arnuld.blogspot.com/