I'm using a Happs trackball, connected via USB. I don't remember having to add the -mouse option before either. This time though, when I started Crystal Castles, choose Analog controls and tried to set the X and Y axis, the trackball didn't respond. I added -mouse and the trackball responded.
I thought maybe there was a mousecursor option I wasn't aware of that I could enable/disable.
Let me go back and check things.