I think that the second Input Deivce is an error. make a backup copy of your XF86Config file (ie XF86Config.bak), and remove the second input device section. Save, and restart X. If that screws with X for some strange reason, simply exit X (alt+ctrl+backspace), and rename the XF86Config.bak to XF86Config, and try tweeking the mouse settings under KDE control panel
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