I have installed SUSE SLES11.0 and when it boots up, the keyboard works, but the mouse does not. I am connected via a KVM, and the pointer does not move when I move the mouse.

I have run:
> init 3
> cat /dev/input/mice
> sax2 (after I got the mouse working)

But after the reboot, it no longer works within the gui.

I have already searched for hours via google and tried many things to no avail. Any help would be appreciated.

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.

what is xorg.conf supposed to look like?

I fresh installed the SLES 11, and I still can't get the mouse to work anymore???

The answer to your first question is: it depends on your hardware.

You said before you ran sax2 "after I got the mouse working," so what exactly did you have to do before to make that happen?

I unplugged and re-inserted the mouse into the USB port, and the pointer on the screen started working. I've since read that I should have seen garbage characters being printed to the screen, which I did not. So I'm wondering if I ever really had it working prior to running sax2.

Issue is solved. It turned out to be an issue with the Management Module on the Bladecenter chassis housing the server blade. Thanks for the support!