Keyboard and Mouse Not Working

I had the same problem yesterday. I'm not sure if it's the only way but I resolve this by reformatting the hard drive. There may be another solution out there.

But if you have an external 2.5" hard drive (I used a WD Passport) and a Time Machine back up, then you're good to go.

Here's the steps that I took:
1: Take apart your WD Passport to use as a startup disc (you do not need to format the drive). Disconnect the usb adapter from the drive.
2: Replace your internal hd with the passport hd (again there is no need to reformat the drive). Then connect the usb adapter to your original internal hd.
3: Boot your mac and insert your Mac OS X Install disc 1.
4: When they ask you what hd you want to install Mac OS X, connect your external hd to the usb port.
5: Go to Utilities on the Menu Bar then select Disk Utility. Reformat your original internal hd.
6: Exit Installer and shut down your mac.
7: Swap out the hd again.
8: While booting your mac hold the eject button. When your disc ejects, wait a few seconds then insert it back in.
9: Install OS X and if you have a Time Machine... I'm sure there's no instruction needed for that.

That's how I resolved (resolving) this problem. Goodluck. If you have any questions let me know. Again there may be another solution. But this worked for me.