Thanks for clarifying the problem you were having.
I have used an optical USB mouse on SuSE 10 OSS and a Dell D505 laptop which also has no PS/2 ports and had no problems. When I used 9.2 I used it with PS/2 ports and USB ports ok on Dell GX150 desktop.
I have also used a USB to PS/2 converter plug to enable me to use my Microsoft keyboard which is PS/2 on the Dell D505 laptop. What make and model is the Dell you are using?
If the hardware works on Windows XP but freezes on SuSE the problem appears to be software not the BIOS or hardware. The only thing I can suggest is try say 10.2 or 10.0 and see how it goes. I have had problems with upgrade from 10 to 10.2 with the video and mouse configurations for some reason. Both PS/2 and Alps Glide drivers are loaded. But you have a desktop. It may help to boot with CD and type 'dmesg' in konsole to see kernel hardware messages.
I believe the problem is in:
1. xorg.conf which can be configured using SaX2 from the command
line or using a text editor such as vi or nano to edit the /etc/xorg.conf file. Create a backup copy first! And make sure you have intimate details of your hardware on hand.
2. There may be a problem wth the kernel configuration, I don't think this is the case.
3. There may be a problem with allocation of IRQ's etc but this is unlikely. It may help to disable any devices and COM ports you are not using in the BIOS to free up ports and IRQs, also check PS/2 are disabled.