I'd say it looks like sax2 broke the mouse, since it was working before you ran it. I don't have many good things to say about sax2, myself.
1) Apply service pack 1, because SLES 11.0 is out of support. That might fix your problem.
2) If not, give the Yast2 mouse module a try.
3) Finally, you could try modifying /etc/X11/xorg.conf manually, though this is not typically a good exercise for people who don't know what they're doing. What might prove more productive, though, is to compare the xorg.conf file that existed before sax2 broke it (it should be in the same directory as xorg.conf~) to the current one.
4) When all else fails, you have an enterprise Linux for a reason, so contact support.