Since time immortal, all Windows mouse drivers, by default, go looking for a mouse on all of your serial ports, even when it’s already found a mouse on your ps2 port.
This is a problem when you have a solaris workstation’s console connected to your pc’s serial port, as the scanning process sends a break over the serial port, which dumps a solaris machine down to the forth prompt.
On all the windows I had encountered prior to XP, I was able to find a registry entry for the mouse driver that described which ports it searched for a mouse on, deleted the serial ports, and the problem is solved. But I can’t figure out where to do that in XP.
The NoSerialMice switch in Boot.INI would make it do what you describe, for NT at least.
Google Groups has mixed reports about this working with 2K and XP, but its probably you’re best shot.
The other option is to disable the sermouse service completely by going into HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\sermouse and setting “Start” to 4 (disabled). Of course, this will turn off all serial mice.