Hi,
It should work if it isn't faulty - maybe you configured it as a serial mouse or something. Anyway, try using the 'mouseconfig' utility. That does both the console mouse config and also updates your X config too if you wish :
# /usr/sbin/mouseconfig
If you don't have that program you need to install the rpm of the same name - i.e. ftp://rpmfind.net/linux/redhat/7.2/en/os/i386/RedHat/RPMS/mouseconfig-4.23-1.i386.rpm
Download and install as root with :
# rpm -Uvh mouseconfig*.rpm
Hope this helps