Quick note to everyone here re. USB mice & laptops :
1. USB mice themselves do not require any special drivers to work. The only driver required is the one for USB controller which should already be installed anyway.
2. Test the mouse on another computer if you want to be certain whether the mouse is actually faulty.
3. If mouse works on another computer or if you don't have access to another computer, then after XP has loaded up, try unplugging & reconnecting the mouse. If it works after this, then go to device manager, expand the USB Controllers branch, double click on the Root Hub entry, select the Power Management tab & clear the 'Allow computer to turn off this device to save power' checkbox. If you have more than one Root Hub entry, then repeat this for all of them.