I had multiple USB mice working in AdvanceMame (without X) at one point a while back...  Let me check my notes.  Here's what I wrote down:
- ps2, logitech, ms didn't work, but imps2 did:
  device_raw_mousedev[0..3]  auto
  device_raw_mousetype[0..3]  imps2
Also try the following if you want to specify which mouse controls which player:
  device_raw_mousedev[0..3]  /dev/input/mouse0
Don't forget to try the advm program to test your mice.  If I run the following command:
$advm -device_mouse raw
I am able to watch mouse data scroll accross the screen.
Good luck getting it to work!
(EDIT)  Oh, yeah, I should also mention that Iwas running advmame in console mode, so I wasn't running KDE or X or anything like that.  I was using SVGALIB.  It was a stock Mandrake kernel that I was running.  I'm currently working on the Framebufer w/Matrox card.