As a follow up, this happened on 2 m/cs.

I managed to get one working by unpluging the mouse and plugging it in again when I find that Win98 could not detect the mouse either. Could it be that Knoppix have affected the mouse somehow even Win98 could not detect it?

On the other m/c where I have RH9, WinXP and Knoppix installed, the mouse works in RH9 and WinXp.

BTW, its a PS2 scroll mouse.