|"...When it rebooted, XP recognized the receiver,..."|
It's a USB "transceiver" (transmitter / receiver).
You should have mentioned it's a wireless mouse, first thing.
Is it a recent model or an older model ?
Older models may not work automatically - they can require some thing or things you need to do to get them working. E.g. an older model a friend has requires that you need to press one of the buttons on the mouse in order for the cursor to be able to move when you first start up the computer.
In any case, if the same model of wireless mouse's USB "transceiver" has not been plugged in previously for the same Windows installation, the mouse cursor will NOT move the first time the "transceiver" has been plugged in until the desktop screen has loaded and then generic drivers for the "transceiver" have been loaded in the background, THEN the mouse can move the cursor in Windows and while loading Windows, e.g. at the Login screen, from then on.
If you need to Login to a Windows user while booting in that situation, use the Tab key, cursor keys, and the Enter key to toggle which thing on the screen is selected.
Are you SURE the battery (batteries) in the mouse have enough voltage (capacity) left ?
Have you dropped the mouse, or is it possible someone else dropped it ?
I know from experience that wireless mice are relatively fragile and don't stand up to being dropped well. If they've been damaged, they tend to sometimes work, sometimes not, before they never work.
"1. same mouse in all USB ports and it did not work.
2. different mouse in all USB ports and it did not work.
3. Original mouse on another computer and it worked."
"5. System restore from 2 weeks back. When it rebooted, XP recognized the receiver, had mouse activity for about 10 seconds. Then it stopped working as all other drivers, etc. were loaded.
6. Booted to a Windows 7 BootableCD and mouse worked. "
"10. Able to acces via a remote control program and mouse responds from the remote computer, but not the Host computer where problem resides."
The problem mouse and the "different mouse" are both wireless mice, I'm assuming ?
Usually you MUST use the "transceiver" that came with the same mouse. If you don't, the wireless mouse may NOT work, even if it's a "transceiver" for the same wireless mouse model.
If you're sure you haven't mixed up which "transceiver" is for which wireless mouse, then it appears you ONLY have this problem with / inside the one existing Windows installation.
Is this on a desktop computer ?
"USB mouse not working in Windows XP. All other USB devices are recognized, installed and working."
......in rare cases you can have an IRQ sharing problem that causes SOME more sophisticated USB devices, such as a wireless mouse or keyboard or a USB connected printer, to NOT be detected properly, despite some or all other USB devices working properly.
The bootable Windows 7 disk would not necessarily be loading all the IRQs for the devices, so the problem USB device may work fine when you boot from the disk.
See response 3 in this: