Comment 6 for bug 294791

So it seems that my issue was resolved by fixing the xorg.conf file.
Amanda, Cory - If you want to upload your xorg.conf file (in /etc/X11 , it has no personal information) we can see if its the same issue that I had. You can also search the file for the words "mouse" and "keyboard" - if you find them in an un-commented line, it's probably the same issue.
Ubuntu guys, to summarize :
nvidia-xconfigure, "dpkg-reconfigure xserver-xorg" and (possibly the recover-X11 boot option) corrupts xorg.conf (w.r.t. the mouse / keyboard)

Thanks,
Guy