Flight 5: passing 'psmouse' kernel argument broken?

[Obi Bok]

I use a KVM switch which has an annoying side effect that makes the mouse 
pointer jump all over the display after switching to another PC and back. 
Fortunately, there's a fix for that by simply passing 'psmouse.proto=imps' to 
kernel (alternatively 'psmouse.proto=bare' but it disables the mouse wheel). 
It worked as expected in Breezy (also tested with success in the latest SuSE 
and Fedora) but seems to be broken in Dapper - Flight 5.

Instead of the kernel argument, I tried 'psmouse proto=imps' in /etc/modules 
but it didn't work. Just out of curiosity I also tried changing:
Option          "Protocol"              "ExplorerPS/2"

to:
Option          "Protocol"              "ImPS/2"

in /etc/X11/xorg.conf but it made no difference. At this point I need to 
manually 'rmmod psmouse' and 'modprobe psmouse' every time I switch between 
systems. Can anyone else test this? Any ideas if this has to do with the 
kernel or if it's Dapper specific?