Multiple mice are supported under Windows 9x and Windows XP using Mame Analog+/No Name Mame, but NOT Windows 2000. There is a way that it could be possible to add multiple mouse support using Windows 2000 called cpnmouse:
http://cpnmouse.sourceforge.net/However, it's a little bit more complicated than the current Win XP/9X solutions because you need to use a special mouse driver, and there haven't really been enough people begging for Windows 2000 support for multiple mice to have made it worthwhile. There's actually only one other person that I've heard mention it so far.
If you are running Mame Analog+ or NoName on Windows 9x, then you must use all USB mice to enjoy multiplayer mousing. However, under Windows XP doesn't have this restriction, so you can use serial, ps/2, and usb mice.