All USB mice do not work after driver install

So i've done quite a but of seaching on this and found some simliar problems, but none with answers that have led me in the right direction as of yet.
(This was closest, but again no answer really ... I PMed the user to see what was result, but no response yet )


Right after installing windows XP on this computer, USB mice wouldn't work. Thought it was a bad mouse and tried another one. When it first got plugged into the USB port it starts being able to move (while windows is installing the proper drivers), and as soon as the driver installation completes the mouse will not move. To fix the problem before I just tried a Ps/2 mouse and that worked fine.

Now I have a use for the computer that I need to be able to use a wireless mouse and keyboard combo (Logitech EX100 if it matters) and again the same scenario happens. When I first plug in the device i'm initially able to move the mouse for the few seconds while windows installs the drivers, as soon as they are installed the device stops moving. After the inital install the mouse just does not work when unplugged/ replugged again. The USB keyboard and the USB keyboard that is the part of the USB mouse and keyboard combo both work fine.

Steps I've tried / pertinent info

1. There is nothing with yellow (!) exclamation in device manager
2. I have tried uninstalling the USB Human interface device as well as USB composite device (wireless combo) and then reinstalling them. Same thing happens i'm able to control mouse and make cursor move while they are being reinstalled but once the install is done they stop.
3. I've tried a repair install of windows a year ago when this started (however I cannot remember if it was with the same CD or not so a possible avenue to take might be a repair install with a freshly burnt win xp SP3 cd, idk)
4. I've tried it in safemode and the same thing happens -USB mice do not work except if they are being installed they work momentarily
5. I've tried it in Knoppix live CD and both USB mouse and the USB mouse part of the wireless combo work just fine (this seems to rule out a bad mobo)
6. I have tried changing the settings in bios for how USB devices are treated (tried full speed vs high speed etc, also tried the emulation support enabled or disabled).... no change

I'm kind of stuck. I don't know what the next diagnostic or repair step should be. I could try another repair install of XP with a freshly burnt CD, or if someone knows how to indivdually replace the USB Human interface device drivers for a mouse maybe that would be helpful (i'm not aware of how to do that).

I'm open to other suggestions or if i've left important info out let me know.

Thanks
Marty