Just for your information: the "unknown device" thing just means that the device does not provide text information describing itself. It only provides numbers (04b3 and 3107, which hwinfo looks up in a database and identifies as "IBM Corp." and "ThinkPad 800dpi Optical Travel Mouse"). Since VirtualBox doesn't have such a database, it takes the quick option and says "unknown device". (Note: try doing "lsusb -v" and you will see that the "iManufacturer" and "iProduct" entries for the device are empty).
What this means is that if it is not working in your XP guest, this is not related to the "unknown device" description. Have you successfully used other USB devices in VirtualBox? Is your user a member of the "vboxusers" group? Can you select other USB devices when you right click on the USB icon at the bottom of the VM window?