Sorry, I don't have any help to offer. However, I have the same issue. First I couldn't install with my USB mouse or USB keyboard connected. The kernel messages showed that both USB devices were recognized but would hang until timeout on something USB related just after the USB device recognition. After the timeout it would proceed to the graphical install but no keyboard or mouse functionality. I tried this in all combinations of devices.
So I installed with PS/2 keyboard and mouse. I then edited my XF86Config-4, powered down, removed the PS2 adapter on my USB mouse (came with it), insertd my mouse in a USB port, powered up and it works wheel and all! So I know some USB funtionality is working.
Now if I power down, remove my PS2 keyboard, insert my USB keyboard and reboot. I get to the X logon and no timeout errors occur but the mouse and keyboard are frozen. I should also mention that I have keyboard and mouse USB support enabled in the BIOS.
Anyone have any ideas on this?
MDK 10.0 Official (kernel 2.6.3 I think) on a IDEQ 200V Biostar sff system
Mouse: IBM Optical Navigator (the one made by Micro Innovations)
Keyboard: A4Tech USB