I have a usb keyboard and usb mouse but my xorg.conf has no mouse section at all and it works fine. Are you sure you need that mouse section?
I have a optical logitech usb mouse and Matias usb 2.0 keyboard, the
video card is a Nvidia 8800GT (XFX) so I'm using the closed driver
This is part of my xorg.conf
# keyboard added by rhpxl
Option "XkbModel" "pc105"
Option "XkbLayout" "us+inet"
Option "AddARGBGLXVisuals" "True"
Viewport 0 0
The only good discussion I found about repeating keys was on a ubuntu thread:
someone there worked around it by turning off key repeat in the system setup
in kde4 -> system setup -> keyboard and mouse -> either turn off keyboard repeat or increase the time limit so it's less sensitive
post #18 here mentions using a usb hub as an intermediary to between pc and (keyboard/mouse) helps:
I'd suggest looking into updating the BIOS if possible