You'll use sax (sax2? it's been a while...either way)
Your ps/2 mouse is known as /dev/psaux in linux (almost all flavors recognize it as this)
when you're configuring your mouse, you're not so much configuring it for Linux, but for X (xfree86). Linux is just a kernel, meaning it simply finds the hardware and adds a hook for it. It's XFree86 that makes use of that hook.