I have had the same problem with a few live distros right off the bat and thought it was compatibility problems with my usb microsoft wireless intellimouse explorer 2.0 (hey it was $20).
I just installed Mandriva (formerly Mandrake) Limited Edition 2005 X86_64 a few days ago and it was working better than and other with my system (I have tried about 15 distros!)
All my hardware was detected right down to the make and model number of my lcd monitor,wireless mouse, and ati radeon 9800pro (gasp!!), windows can't even do that.
Anyway everything worked for 2 days, then after rebooting to windows for a few thing I don't have setup on linux yet, boot back into linux and I got the vertical mouse problem.
I didn't make any changes, configs, compiles, or anything. The only thing I tried was remounting an ntfs partition user,rw. After several tries at mouse config tool and reboots it was back
to windows where I came across these forums. So I boot back to linux to try some of the suggestions found here, but my mouse was working when I logged in.
Option "Protocol" "ExplorerPS/2"
Option "Device" "/dev/mouse"
Option "ZAxisMapping" "6 7"
InputDevice "Keyboard1" "CoreKeyboard"
InputDevice "Mouse1" "CorePointer"
Everything looks default (not that I would know
) So if I didn't change anything before or after this started and stopped why is it happening
I am sure it will happen again and I have made note of the suggestions found here. If it works or I find the source of the problem before someone else I will post here with the results.