Rich - I do see the same "drop down" if I click on any of the "Wbar" icons, that is, I see the "drop down" menu appear at the top of the screen on the "1" icon (instead of the item on the Wbar). It's very wierd. The wired mouse works okay.
New phenomenon - sometimes the "wireless" acts a little more normal and CAN click on the other icons.
Sometimes I see ^@ when I click on a window with the wireless mouse.
I'm not sure how to "reconfigure" the mouse with the X server, unless you mean to run "xsetup".
BTW, the MK320 works fine with some other Linux distros (like Mint).