The question remains: Does the system freeze - OR, is it only the mouse that stops? (Watch the clock for a few minutes. If the time doesn't update, then your system has stopped, too - not just the mouse.)
Also, to attempt to get back on track: hold shift while booting to disable extensions, control panels and startup items.
If that resolves the freezing, use the extensions manager control panel or software like Conflict Catcher to find the offending culprit through a process of elimination.
It might be also worth booting from a floppy or CD and running Disk first aid on your startup disk.
Edit: I am assuming you are running a classic Mac OS 9.x or older. If you are getting a hard freeze like that in OS X then I would look at testing and reseating memory modules.