We need more information. Which release of Debian are you running? Stable, Testing, Unstable? The configuration file is called XF86Config-4 (or XF86Config) and is in the /etc/X11 directory. Repost with that included, and the output of the log /var/log/XFree86.0.log.
1. What type of connection is your mouse? PS2? USB? What modules are loaded on the machine? You can send us the output of that with:
What commands did you give the system to get KDE installed? Have you installed any of the meta-packages like x-window-system? (If not, be wary: this is a big one).
Let us know. Your answer may be fairly easy.
For example if you have a USB mouse, change the instances of /dev/psaux in the /etc/X11/XF86Config-4 file to /dev/input/mice and then on the CLI do
You should see a bunch of garbage on the screen. You'll have to CTRL-D to kill that and possibly type the command
Which will clear the screen of the garbage.
I always install the hotplug package when I am on a box with USB devices.