Sorry for the late response.   It's definitely fixed in edgy with

   xserver-xorg-video-ati           6.6.2-0ubuntu4

as I'm using it currently.

I don't remember having the problem in dapper
before installing edgy anymore. 

I started a 6.04.1 Kubuntu life system and there the
mouse is detect after plugged in immediately.

So for my side it's 'fix released'.

Achim

** Changed in: Ubuntu
       Status: Needs Info => Fix Released

-- 
usb mouse not properly initialized
https://launchpad.net/bugs/38555

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