I installed FC1 on a machine with a PS2 mouse (2-button Microsoft) and a PS2 keyboard connection. All working fine.

Now, when I hook up an USB mouse (wheelmouse Logitech), it works fine in the login screen at startup, but I'm unable to type my username and password at the login screen.
(The keyboard worked when I had to select my distro version at startup.)

I rebooted and put back in the PS2 mouse, now the keyboard worked and I was able to login. Once the OS was booted, I could use both mice without problem.

I didn't notice any error messages during startup, but I noticed 2 black screens when the USB mouse was plugged in.

One just before the 1st GUI screen (where you can see details about your startup) and a 2nd time when the login screen should appear.
These black screen last about 5 seconds before they disappear.

Any ideas on how I could fix this?

The black screens are normal. The first one is when the bootloader reads the message.ja file (I think) in the /boot directory and the second black screen is when X starts up. I think you weren't able to log in because the cursor was not in the login box when you started typing (happens a lot of times). If it was, try reseating the keyboard and typing again.

1. the cursor was most definately in the login box.

2. the black screens do not occur with the PS2 mouse connected.
It gives me the impression that there is a conflict going on, coz after the abnormal black screen I can't use the keyboard at the login screen.