I'm not running Linux at the moment, but according to http://blog.bodhizazen.net/linux/kvm-mouse-integration you need to restart libvirt after you've edited the xml file If you don't edit the xml file directly but use "virsh edit reactos" instead one does not need to restart libvirt. But ...

with -usbdevice tablet it i get working mouse on 0.3.16 and bootcd-62690 I tried the same using qemu 2.1.2 (Fedora 21) and exactly the same boot image (bootcd-62690-dbg) but failed, the mouse does not work here. I also tried the image bootcd-64717-rel, same result. So it seems to me that the "...