Every time I log onto X (RH8, using gnome, but pretty sure it happend with KDE too), my mouse sensitivity is really low and the mouse moves so slooow... If I run redhat-config-mouse and then hit ok, without changing the mouse type, the mouse is reinitialized gets its speed back. Once I log off and then back on, the mouse is back to its crawl and I must run the config again.

I'm using a MS intellimouse explorer optical mouse. Its a USB mouse, but I use the supplied ps2 adapter.

Here are the relevant sections in my XF86Config:

Section "InputDevice"
Identifier "Mouse0"
Driver "mouse"
Option "Protocol" "IMPS/2"
Option "Device" "/dev/psaux"
Option "ZAxisMapping" "4 5"
Option "Emulate3Buttons" "no"
EndSection

Section "InputDevice"
Identifier "Mouse1"
Driver "mouse"
Option "Device" "/dev/input/mice"
Option "Protocol" "IMPS/2"
Option "Emulate3Buttons" "no"
Option "ZAxisMapping" "4 5"
EndSection

I have no idea why there are two mice configured. Is this a problem?

This might sound stupid, but isn't there a save settings option or something?
In your XF86Config file you only need the one with the Option "Device" "/dev/psaux" option as this is the one connected to the ps/2 port.

Your second section dealing with "Mouse1" should be commented out (have # at the beginning of each line) unless you have more than one mouse. Additionally, try adding a SampleRate to the configuration:

Section "InputDevice"
Identifier "Mouse0"
Driver "mouse"
Option "Protocol" "IMPS/2"
Option "Device" "/dev/psaux"
Option "ZAxisMapping" "4 5"
Option "Emulate3Buttons" "no"
Option "SampleRate" "150"
EndSection

Play with the SampleRate until you get smoother motion. Hope this helps.