consistently; running windows 98se on a dell xps t500, w/ ibm optical navigator mouse (which ran fine for months), and ms natural keyboard (OEM keyboard, has also run fine for yrs). . . when booting, the keyboard doesn't flicker, doesnt light up, and the mouse will either remain unlit on scroll-button, or will flicker (seemingly in synch w/ grinding of hdd); after windows boot splash, my desk top image pops up w/message stating "windows did not detect a mouse. . . you must restart your computer to add a ps/2 mouse. . ." and if just the keyboard is detected, and i go into the desktop load page, there is no way to initiate a new hardware search on control panel. . . very frustrating, and i may reboot ten times to find both keyboard and mouse, which is terrible for my tower as the powerup is most volatile process of a personal pc. . .
\the diagnostic lights in back of tower read "usb port fails detection". . .
any theories are welcomed; hope this is the correct forum for this question, not a core hardware post; windows post. . .

j.edge.

These are both USB devices?

It seems by the fact that they are not working and the diagnostic LEDs on your machine that you actually do not have keyboard or a mouse problem, but rather a USB problem.

Dose you machine have available P/S2 ports for the mouse and keyboard?

If so try using a P/S2 device instead of the USB one...... as it stands you can't even enter the BIOS to check for problems there.

If you don't have P/S2 ports then, by any chance do these devices use batteries?

Also how many USB ports does you machine have and have you tried swapping them?