Try running with the following setting for your mouse in your VMX file
mouse.vusb.enable = "FALSE"
Workstation 7.1.2 works fine, are you using Albert's "Unlocker" or Donk's darwin iso, the "Unlocker" is what I, Donk and others now use for Workstation and Donk's latest 310 darwin iso for ESXi 4.1. The most common problem is the update, as it is note really an update at all it uninstalls the previous version and then does a fresh install of the new version so any patches are lost. You need to re-install either Albert's "Unlocker" or Donk's 310 darwin iso before trying to run OS X again.
mouse.vusb.enable = "FALSE" - didnt work. My mouse works on other vms - ubuntu- redhat, win....