Actually PS/2 mice work well with a 7.1 kernel, but not with a 7.2 one. The old version of Xorg from debian-ports works with both 7.1 and 7.2 kernels.
Continuing my monologue, I have found that *reverting* the following patch fixes or workaround the problem. But doing so may also hide a problem elsewhere. Any idea?
Revert it for now. Currently, xorg is the main user of mouse device, we do not support moused yet. It would be much better to have xorg working just now. Thanks for investigating this Petr