I just booted 4.0.2 DVD. My USB mouse (Logitech) worked fine. This on an HP notebook. I had previously used 4.0.1 on it with good results too.

Can you get any other USB device to work? Flash memory? Anything that might help determine if it a mouse issue or a USB issue? Got any other USB mice?

Personally I have low expectation that any hardware with a Microsoft logo will work under Linux, even a mouse. But I'm just synical that way (and have seen the dirty stuff MS does too many times).