I have been having this problem on Windows XP Service Pack 3 Build 2600. It is a Korean version.
I have it installed in a virtual environment. I have tried to change in VirtualBox to PS/2 Mouse, but it didn’t work too.

Keyboard works just fine in boot mode, when I’m trying to choose a F8 options like Safe mode and so on. When it boots, the mouse and keyboard just hang there without any action. They doesn’t work in any other boot option, even in safe mode or prompt.

So I booted a new sp3 version, used the same installation (partition) which generated a new installation item in the list of installation on boot time. I booted in this new installation and the mouse and keyboard worked just fine. So I copied the drivers:

• system32/i8042prt.sys
• system32/kbdclass.sys
• system32/mouclass.sys
• inf/msmouse.inf
• inf/msmouse.pnf
• inf/keyboard.inf
• inf/keyboard.pnf

Then I replaced with these file from Korean version of windows the one that doesn’t work. The mouse was GONE from the screen. The keyboard still didn’t work. So I back it up only the i8042prt.sys. Still nothing. Then I back it up mouclass.sys and kbdclass.sys with i8042prt.sys from the working installation. Still nothing.
I don’t know what can I do. Any thoughts on it ?

I have explained everything. I tried installing a new SP3 in the same partition which generated a new installation that I could boot on. Then I replaced mouse and keyboard drivers with the ones of this new windows xp sp3 installation that the mouse and keyboard was working just fine. Nothing worked on the korean version and the mouse was gone after the files replacement.