The following changes to /etc/X11/xorg.conf fix this problem:
Section "InputDevice"
Identifier "Configured Mouse"
Option "Device" "/dev/input/mice"
Option "Protocol" "ExplorerPS/2"
Option "SendCoreEvents" "true"
Option "CorePointer"
Driver "mouse"
EndSection
...however this bug should remain open, since this should have been set
up by default upon install, or upon first connection of a USB mouse.
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[Hardy] External mouse on laptop will only double-click
https://bugs.launchpad.net/bugs/188351
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