It doesn't work for me.  Here is what I did and what I get:

scott@scott-laptop:~/Downloads$ sudo dpkg -i psmouse-0.2-1.all.deb
(Reading database ... 169802 files and directories currently installed.)
Preparing to replace psmouse-dkms 0.2-1 (using psmouse-0.2-1.all.deb) ...

------------------------------
Deleting module version: 0.2
completely from the DKMS tree.
------------------------------
Done.
Unpacking replacement psmouse-dkms ...
Setting up psmouse-dkms (0.2-1) ...

Creating symlink /var/lib/dkms/psmouse/0.2/source ->
                 /usr/src/psmouse-0.2

DKMS: add Completed.

Kernel preparation unnecessary for this kernel.  Skipping...

Building module:
cleaning build area....
make KERNELRELEASE=2.6.35-24-generic -C /lib/modules/2.6.35-24-generic/build
M=/var/lib/dkms/psmouse/0.2/build....(bad exit status: 2)

Error! Bad return status for module build on kernel: 2.6.35-24-generic
(x86_64)
Consult the make.log in the build directory
/var/lib/dkms/psmouse/0.2/build/ for more information.
0
0

Error! Could not locate psmouse.ko for module psmouse in the DKMS tree.
You must run a dkms build for kernel 2.6.35-24-generic (x86_64) first.
dpkg: error processing psmouse-dkms (--install):
 subprocess installed post-installation script returned error exit status 4
Errors were encountered while processing:
 psmouse-dkms
scott@scott-laptop:~/Downloads$ cat /var/lib/dkms/psmouse/0.2/build/make.log
DKMS make.log for psmouse-0.2 for kernel 2.6.35-24-generic (x86_64)
Mon Jan 17 13:50:15 PST 2011
make: Entering directory `/usr/src/linux-headers-2.6.35-24-generic'
  LD      /var/lib/dkms/psmouse/0.2/build/built-in.o
  CC [M]  /var/lib/dkms/psmouse/0.2/build/appletouch.o
  CC [M]  /var/lib/dkms/psmouse/0.2/build/bcm5974.o
  CC [M]  /var/lib/dkms/psmouse/0.2/build/gpio_mouse.o
  CC [M]  /var/lib/dkms/psmouse/0.2/build/psmouse-base.o
/var/lib/dkms/psmouse/0.2/build/psmouse-base.c:48: error: variable
‘param_ops_proto_abbrev’ has initializer but incomplete type
/var/lib/dkms/psmouse/0.2/build/psmouse-base.c:49: error: unknown field
‘set’ specified in initializer
/var/lib/dkms/psmouse/0.2/build/psmouse-base.c:49: warning: excess elements
in struct initializer
/var/lib/dkms/psmouse/0.2/build/psmouse-base.c:49: warning: (near
initialization for ‘param_ops_proto_abbrev’)
/var/lib/dkms/psmouse/0.2/build/psmouse-base.c:50: error: unknown field
‘get’ specified in initializer
/var/lib/dkms/psmouse/0.2/build/psmouse-base.c:50: warning: excess elements
in struct initializer
/var/lib/dkms/psmouse/0.2/build/psmouse-base.c:50: warning: (near
initialization for ‘param_ops_proto_abbrev’)
/var/lib/dkms/psmouse/0.2/build/psmouse-base.c:54: error:
‘param_set_proto_abbrev’ undeclared here (not in a function)
/var/lib/dkms/psmouse/0.2/build/psmouse-base.c:54: error:
‘param_get_proto_abbrev’ undeclared here (not in a function)
/var/lib/dkms/psmouse/0.2/build/psmouse-base.c: In function
‘psmouse_attr_set_protocol’:
/var/lib/dkms/psmouse/0.2/build/psmouse-base.c:1596: error: ‘struct serio’
has no member named ‘children’
make[1]: *** [/var/lib/dkms/psmouse/0.2/build/psmouse-base.o] Error 1
make: *** [_module_/var/lib/dkms/psmouse/0.2/build] Error 2
make: Leaving directory `/usr/src/linux-headers-2.6.35-24-generic'
scott@scott-laptop:~/Downloads$