Can you try this in console (CTRL-ALT-F1):
sudo rmmod psmouse
sudo modprobe psmouse proto=imps

If it works after, then, this is a dup of bug #335297...

There has been some work in the kernel related to mouse handling, so,
the problem is a recursion from 2.6.28 update that comes in Jaunty. Let
me know after the rmmod how it behaves.

Thank you again, and don't worry, this will get fixed...

** Tags added: likely-dup regression

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Jaunty : frozen mouse on my PCs
https://bugs.launchpad.net/bugs/342156
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