I had the same problem with my compaq armada e500. I've been using an external PS/2 mouse for over a year and just now fixed the built-in touchpad buttons. In the mouse settings applet in control panel there is a setting for click speed. In Win 2k there is a little jack-in-the-box test icon. I moved the click speed slider to the slowest setting and my mouse came back like magic. I've searched and found lots of people with this issue, I can't say this is the only solution, but it certainly was easy. Of course, first I downloaded all the original COMPAQ Armada e500 notebookPC touchpad software from
http://h20000.www2.hp.com/bizsupport/TechSupport/SoftwareIndex.jsp?lang=en&cc=us&prodNameId=96717&prodTypeId=321957&prodSeriesId=96231&swLang=8&taskId=135&swEnvOID=181
BTW, I appreciate the workarounds offered by posters here and on other tech support sites, but when someone wants to fix something, it doesn't help to say, "Oh, just give it up and spend money to get around the problem."
If you are still out there, dave, Instead of a USB hub, may I suggest (if you have the resources) picking up a PCMCIA card with at least two more USB ports? They are less than $100 and it really saved my neck when my onboard USB died. Don't be offended, but just in case you haven't noticed you have them, the slots are on the right side of your E500, just to the left of the headset and mic ports. The e500 has two slots and the cards come in different sizes for different laptops, but ours is (luckily) pretty standard. I bought my card at BestBuy.
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