XP - PS/2, serial, and USB mice can all be indivually selected as controllers.
Win98/Me with DX7 and up. USB mice only can be selected as individual controllers.
Actually my Win98SE test system did not work with DX7, but did with DX8. That might have been due to some remaing parts of Logitech Mouseware.
Logictech Mouseware drivers should not be used. They disable multi-mouse support.
[EDIT] Mouseware seems to not cause any problems on XP. But it will bugger other versions of Windows. DO NOT report bugs while mouseware is installed.
D.