OK - got it working....For the benefit of others, here's what I did:

As root:

modprobe hid
modprobe mousedev

In /etc/modules-2.4.27, added the followeing lines at the bottom:

hid
mousedev

In /etc/X11/XF86Config-4, changed


InputDevice "PS/2 Mouse" "CorePointer"

to:
InputDevice "USB Mouse" "CorePointer"

Rebooted.