Is it a serial mouse? Then that could be the solution:

You need to alter one of your config files. In order to get there and do that, do the following:

To be on the safe side you might want to back up the config file before you mess with it. To create a backup, type the following in the console before starting:

sudo cp /etc/X11/xorg.conf /etc/X11/xorg.conf.bkup

Then to open a text editor, type
sudo nano /etc/X11/xorg.conf

Scroll down through the file until you find the section for the mouse.
Change the line area that says
/dev/mouse/generic

to read /dev/ttyS0

Note: that 0 is a zero, not a big letter O. I messed that up, and it took me hours to figure out why.

I've also found that you should change to protocol section to read "Microsoft." I've only found this in some help guides, so I'm not sure how neccesary it is.

All you do now is hit ctrl+x to leave the editor, and y to say you want to save, and press enter to save the new file over the old one.

Hit alt-F7 to get back to the mouseless X window.
Hit ctrl-alt-backspace to exit X.
In the console that X exits to, start X again by typing startx&
Serial mouse should now be working.

That was kind of complicated for me, so I just rebooted after saving the file. It worked for me. :)

There's an old but still good mini-HOWTO out there, how to use a 3 Button Serial Mouse under Linux.

http://www.faqs.org/docs/Linux-mini/3-Button-Mouse.html

to read /dev/ttys0
Note: that 0 is a zero, not a big letter O. I messed that up, and it took me hours to figure out why.

The "S" in "/dev/ttyS0" needs to be capital, that also took hours of puzzling for me to figure out.

I fixed it in the posting from MikeTT

Hi, i have am not able to run the Ubuntu Linux live cd for both the pc and the 64 bit editions. i am using an AMD Athlon 64 3000+ @ 1.8 GHz with 512 MB of DDR 333 RAM. it says that the xserver is unable to open and that the graphic options are not configured correctly. please help!!!!

I got my serial mouse work this way (In Ububtu live CD version 5.10 for PC) by doing the following (almost according to MikeTT's instructions):

1. press alt+ctrl+f1 to get to console.
2. replace "/dev/input/mice" by "/dev/ttyS0" in the mouse section of etc/X11/xorg.conf (there was not "/dev/mouse/generic" there, though) and change the mouse protocol in the same section to read "Microsoft".
3. restart X by typing alt+f7, ctrl+alt+backspace, startx& (like MikeTT told). BTW If you reboot from live CD, how can the system remember the changed configuration settings? Is it rewritable media?

Now mouse is working, but I tried to run Firefox and it just did not appear to screen. It just keeped loading and finally I decided to turn power off. I have 128 MB RAM memory in the machine. BTW I tried couple of years old Knoppix (live CD) and did not have such problems with it.

the mouse didnt work for me in ubuntu 7.10 until i stopped plugging it into the usb and instead used the green thing on the following photo:http://www.dptechnologies.ca/pb/wp_4a9a3225/images/img298974369797147256.jpg

live free or die tryingi have two problems if any one can help me becase i am new in linux  and my computer has worked good on windows vista but now it's not working on kubuntu 7.10 i have 2*3.60 cpu /512 ati vga/1024 ddr2 ram /and crt acer 713 monitor i think kubuntu work on low requerment as i think so please help me