Cursor/Mouse is stuck in top left hand corner by apple icon HELP

My cursor is stuck in the upper left hand corner and will not budge. I've restarted from the OS disk, looked at system profiler - usb profile and the mouse appears. This means it should be software related, not hardware related. I've restarted the cpu multiple times logging in under differnt users and have replaced the mouse & keyboard it's attached too with backups. NOTHING WORKS! My mouse is stuck in the top left hand corner barely touching the apple icon. When I click the mouse, the drop down menu appears so it is communicating with the cpu. However it just will not move/track anywhere! I'm an almost 20 yr mac user having survived a few 'sad mac' faces in the Mac Classic, Performa, & 8100 days, but have never run across something like this before.
HELP PLEASE!!! Would love to know a fix for this, or even what has caused it. In lieu of that I suppose I'd be okay with re-installing my system software as all programs & sensative info is on a seperate HD.
FYI I can't reinstall by rebooting via OS disc because the mouse doesn't work. Any help here?
FYI I do not have (not sure what it's called exactly) the function/preference turned on which allows me to move the cursor with the keyboard & can't get it turned on now as I can't navigate the system preferences windows in a functional manner.
Thanks & PLEASE HELP,
Phillip

Phillip,
I had this problem recently with a 3-year old Mac Pro intel, which was eventually replaced by Apple due to myriad other problems. When the frozen mouse happened, there was nothing I could do. Very frustrating to have the screen boot and the cursor is up there stuck, on the top left corner of the screen. Frozen. I called support several times. They were amazed. At one point they had me buy a cheap USB mouse (I was using a wireless mouse from Logitech and they thought there might be some kind of conflict). The USB mouse didn't work, either. Neither did an Apple mouse when I went out to buy one.
I ended up driving 70 miles to take the Mac to an Apple Store. I think they reinstalled the (Leopard) system in some secret way, because when the mouse was frozen so was everything else and I couldn't open the disk drive to put the OSX disk in there.
Why I'm here right now is that the same thing happened today with my NEW 3-month-old REPLACEMENT MAC PRO using its brand new wireless mouse, and I was hoping to find some insight. Again, a frozen cursor after the boot. Same top-left corner of the screen. Unlike you, when I click the mouse nothing happens -- no drop down.
Luckily, when I hard-rebooted by holding the button in, the mouse cursor came back. This time. Now I am afraid to turn my computer off. Been there done that before. Anyone have suggestions?
Thanks in advance.

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