Also make sure "Mouse Pointers & Icons" is installed in the "Windows Setup." You may need the Win98 CD (so get it handy). Start>Settings>Control Panel>Add/Remove Programs>Windows Setup Tab>Accessories>Details Button>Mouse Pointers (Make sure there is a checkmark in the box to the left of "Mouse Pointers").
Also check the Device Manager and see if there is a problem shown w/ the mouse, any USB devices or the USB hub's installed. (You can use the driver disk you received w/ the mouse and re-install it there if necessary to fix any driver problem). Click on the shown problem device to highlight it, click properties, then click drivers tab for the device, then reinstall the driver, use the disk for the mouse driver installation and the CD for any Windows (or USB), drivers needed.
Good Luck.