I started to have this when I installed GNOME. After that I installed KDE, and noticed it was still happening. I found out that gdm was running as a daemon, and rm'ed it from the /etc/../.. . It cleared up for a bit, and now it's doing it again. I tried changing the mouse config in xf86config, but it's still not working. Now I checked the '/var/log/XFree86.0.log' file, and it says: Generic mouse : cannot open input device
PreInit failed for the input device "Generic Device"

There was a program that I had used that set up my mouse before, but I've forgotten it's name. I tried xf86config, but no help at all.

what exactly is the mouse doing?

I figured it out. The gdm file was causing a conflict. I uninstalled it, and everything is better.