I searched through google groups and found a solution that works for me.
psmouse.proto=bare
I placed this in line with my grub setting in
/boot/grub/menu.lst
It is near the end of the line that points to the "vmlinuz" kernel.
So far so good.
I am using the Belkin SOHO PS2 Omniview 4 port KVM.
so far I am in my happy place.
ronin42