Previously, I had this problem of my touchpad and my USB optical wheel mouse not working simultaneously. Thanks to LQ threads under Hardware section, now I can use my USB mouse, touchpad and trackball simultaneously.
I'm running Mandrake 9.2 on my IBM R40 laptop. Incase anyone using Mandrake has the same problem....this is what I did....
(1) boot linux first with USB mouse connected...linux detects it and works fine...but no touchpad
(2) next time I reboot this time removing my USB mouse...linux detects psaux (touchpad) this time and configures it....but no USB
(3) Finally, I again reboot this time USB mouse again connected...now when booting linux displays MouseDrake, asking you to configure your new USB mouse because it assumes touchpad to be disconnected. This time, select both PS/2 and USB mouse options....and voila! I can use both simultaneously now...
I didnt have to change any of my BIOS settings to do this....unlike some postings in other threads stated. And also no need to change Xfree86 config file!
Now one more thing...though my trackball is working....it has 3 accompanying buttons....the middle one (scrolling button) is not working....any pointers as to how I can get the scrolling button working?