I don't know what the exact problem is but it may have been caused by something you have installed or 'fiddled' with. You could try doing a system restore back to a date when you know the mouse was working correctly (if you are using windows me or xp). You don't lose documents etc but you will have to reinstall anything that was installed after the date you restore it to.
System restore can be found under start menu/programs/accessories/system tools/system restore. It's pretty self explanitory and user friendly.
Good luck.