P.S.; A few more questions / scenarios:
What Operating System is on the affected computer? (Windows 95, 98, M.E., XP, etc.)
Have you been getting "Faults" (window that pops up, has a red "X" on the right side, and says "This Program Has Performed An Illegal Operation, And Shall Be Terminated")?
Have you seen the "Blue Screen Of Death"? (Blue screen with white text saying something like "An Exception Has Occured").
The erratic Mouse / Cursor movement is from a conflict between it and some other hardware, both wanting attention at the same time, plus both trying to "be at the same place at the same time".
If not an address / IRQ issue, then something is running in the background, tying up your resources. Could be any number of things - from a virus checker set to "Ultra Maximum turbo Steriod Mode", to a lost driver file, being searched for endlessly by the Operating System or a Program, to some screwy Virus.
If possible, try a "Safe Mode" boot, and see how the Mouse responds in "Basic Basic Pretty Looking Real mode Windows"
The non-complete attempts to install the optical mouse may have left rampant setup routines running endlessly in the background.
Also Winders (Windows) may be freaked out from the "on again-lost again" state of the corded Mouse while trying to get the PS/2 port to work.
Many more questions are sure to come!
Ain't Corn-Puterz fun?
(believe it or not, nerds like us live for this stuff!)