Dissappearing Mouse

This is just a guess, but you might want to check. Did you install your new XP? If you did, then you need to install the driver for motheboard. If you go to device manager, look for the hardware with yellow question mark, that means it needs driver to work. You will see your USB if it is working. If USB has a yellow question mark, then it will deactivate-reactitvate by itself, meaning, one time works, next time off.

This is a clean installation on a new gigabyte motherboard running AMD 3200+. All of the correct drivers are installed, from latest bios to motherboard, etc....

possibly missed the chipset drivers, sometimes USB is in there, but anyway, I have seen similar problems with Kensington Expert stuff in Win2k and XP. Try replacing it, the chipset on the device may be failing. A good way to check is plugging it in to a different system and see if the problem persists.

"All" drivers are installed correctly. Mouse works fine on other machines. Mouse works fine on this machine in WinME and Linnux!!!!

First, uninstall the mouse in Device Manager, then download and install BIOS and Chipset updates for that motherboard.
Next, go into BIOS and check to make sure USB support is enabled for ALL devices.
Restart computer and allow operating system to re-install the device.
After installation, check Device Manager for errors. If none, restart the computer. If the problem persists, it is either the USB connections on the motherboard OR the mouse itself. To eliminate the mouse as the problem, borrow a Logitech or Microsoft USB mouse and start from the top. If it works it's the mouse. If it doesn't, it's the board.
Sounds tedious, but if you want to know for sure, I suggest you do it.