Of course, maestro Richard Miller will no doubt help you figure this out properly, but by way of confirmation that it does all work...
I have a Rev 1, RasPi 'B'. - with an el cheapo keyboard (deliberately no USB hub to keep the power requirement as low as possible as the Rev 1 is pretty miserly about USB power). My keyboard is a "Dynex" (i.e. economy store brand). - with a Logitech M500 (regular corded) mouse - with ethernet connected to an Apple Airport Express The original distribution did not work with the mouse. However, the new kernel and importantly the "kbargs=-b" seems to get the mouse working fine. Other observations: - No keyboard lights (Caps, num lock etc.) work at all. No biggie. - I have had one occurrence of a rapid, continuous, spurious mouse clicking after waking the console up from 'sleep'. Moving the mouse around had it clicking wildly everywhere. No clicking of mouse buttons would restore the normal state of things, so I rebooted. Possibly disconnecting and reconnecting the mouse would have been sufficient.
