I have mounted an optical mouse underneath a hard drive bearing and it works like a charm.
If I get time I will dig up some photos
You need to position it fairly accurately but it only takes a few minutes. Mine is not quite in a straight line but works great on all of the games I have tried (pole postion, warlords, tempest, tac scan, arkanoid, etc.......).
Arkanoid plays especially well (perhaps too sensitive but this can be adjusted). Somebody more knowledgeable may know if this gets around the resolution issue that is talked about so much.
The mouse is nothing special. Just a standard dell optical USB mouse that can be bought for around