Comment 12 for bug 96596

Okay so here is what is happening in device manager.

When just using the touchpad there is an entry for

Platform Device (i8042)
--i8042 AUX port
----SynPS/2 Synaptics Touchpad
--i8042 KBD port
----AT Translated Set 2 Keyboard

However if I start moving my ps2 connected mouse around the CPU goes to 100% and the entry changes to:

Platform Device (i8042)
--i8042 AUX port
--i8042 KBD port
----AT Translated Set 2 Keyboard

While it's like this, the pointer is locked up. As soon as it changes back to the first entry I can use the touchpad again.

Let me know if you need anymore info.