Comment 8 for bug 87262

I confirm that I have the same problem. My virtual Edgy install worked OK, but I upgraded to Feisty via the Update Manager and now the mouse does not work.

The Virtual PC software does not appear to 'capture' the mouse pointer when you click on the virtual machine. Normally the windows pointer disappears and the virtual machine pointer starts to move (but is trapped inside the virtual machine). You must release the pointer by pressing a magic key. It seems it is the capture process that is not working which suggests to me that the Virtual PC software does not think that the host machine has mouse support.