I have 98SE and will give you some tricks to get USB problem solved. (as you have no PS2 Port with your system)
1) Upgrade your MOBO BIOS from Mfg. Site. In my case I upgrade it from Intel site.
2) Search for USB problem shooter with MOBO Mfg. site (it is there with Intel site)
3) In BIOS setting Disable Plug & Play Option
Finish, now your USB Mouse or KB should work OK.
A) If still problem is there, than In Bios you have 2 option for USB configuration. Just Enable only one NAME High Speed USB and disable other one. save setting and run System.
Still have problem
B) than just DISABLE both options for USB in BIOS.
Please use above setting one by one (except first 3 steps I mentioned at the top for upgrade and download).
If possible Note down the ORIGINAL SETTING of your BIOS before making any changes, it will useful for you if any other component starts giving problem after all new changes (possibilities is 0% for problem)