I'm not sure where the red/black wires are coming from, the trackball?
If you are simply connecting the mouse board to the optics in the trackball, then they should be powered from the mouse itself.
Looks like you only have the sensors and not the leds connected. The LED pads from the mouse board should be connected to the leds in the trackball. Remember that LEDs are polarity specific (+/-) so if you connect them backwards, they won't work. You MIGHT be able to check to see if the LEDS are working with your digicam. I haven't tried it on a mouse, but whenever I want to see if ne of the TV remotes in the house is working, I turn on the camera and point the remote at the lens and look to see if I can see flashing. The CCD or CMOS in the camera can see the IR pulses from teh remote. (A little side note there)
Also, if this doesn't work, I hope you didn't lose the optical components from the mouse. You may be able to use those parts on the trackball boards if the trackball components are not compatible with the mouse. It depends on whether they ft on the boards, or whether you can make them fit. If you keep the leads short enough, they should, assuming everything is connected properly.
As for this being a lot of work for little savings, well, for some of us it isn't about saving $3 or $25, it is more about solving a puzzle, or making something from things that shouldn't go together. No disrespect to anyone, we are all here to have fun, but we all have a different idea of fun.

K