Need Help Getting Laser Mouse To Work

[Lions]

Behaves the same under a new user account.

[DeltaMac]

That does help...

Open your Activity Monitor. Move the mouse, and watch the list of processes. click the drop-down menu to change My Processes to All Processes.
Move your mouse, and watch if any processes stop responding - or processor use suddenly spikes, or even RAM memory sudden shows a large change. I don't know why that might happen, but it could be something to watch, as part of the Activity Monitor...

Could be worthwhile to copy files to a USB drive, or flash drive - watching for that copy process to pause, or even fail... built-in USB ports on a G4 tower will be USB 1.1 - so file copying on the USB bus will be really slow.

How much RAM memory is installed?
Do you have OS X reinstall DVDs for 10.4?

[Lions]

It's saying 768 mb RAM.
No I don't have the install discs.

Do you think there could be an incompatibility issue with the laser mouse being usb 2.0 and the g4 being 1.1?

No sudden spikes appeared in the activity monitor when I moved the mouse around with it open under "All Processes". Is there something in particular I should be looking for.... (I assume this is the equivalent of Task Manager on Windows but I really have no idea what the name would be)?

I've tried transferring files from a flash drive once already and it worked.

[DeltaMac]

Yes, Activity Monitor is similar to Windows task manager.
I suggest clicking on the header for %CPU, which would sort the list to show the highest CPU use at the top.
I've never seen a USB mouse that needed the bandwidth of USB 2.0 - but possible, I suppose. You said that you tried a different USB mouse.

The file copy to USB is just another test of the USB bus. You'd want to copy a really large file or app - several hundred MB would be nice. Then a folder with a bunch of small files. Your user/Preferences folder would probably fit that description. Copy both to, and from the USB drive. Copy both directions to see if there's any issues.
If there's really no issue with that type of USB use, then perhaps it's simply a driver corruption of some kind.
Best method to proceed is to reinstall OS X - however, a good next step is to download and reinstall the combined OS X updater. You can get that here: http://support.apple.com/kb/DL170

You did say this is a G4 Server (which is simply a regular PowerMac G4, sold configured with OS X Server). Are you sure that the OS X version is 10.4.11, and not Mac OS X Server 10.4.11?
It doesn't really make a lot of difference for your use, but there's a different updater specific for 10.4.11 Server, which is here: http://support.apple.com/kb/DL177
That's just for OS X Server - so download whichever version you need.

The combined updater will sometimes fix odd issues in OS X, as it does a check for all updates, makes sure that everything is installed as it should be, and hopefully can help with strange driver issues.

[Lions]

Hey... no idea what happened but I restarted a second time and logged back in and its working flawlessly now!