Another thing.
After using Volks method, my wireless mighty mouse works pretty normal.
Didnt notice anything different.
Abras

Thanks volkspost,does not work,my notebook is a new MBP,perhaps this is the problem

I'm using a 2.0 USB Hub and it works great until yesterday.
Today, after i install libusb it does not work any more.
I've tried fix too and didn't works!

I just tried it on my new MacBook Pro and it worked like a charm... i had to run the "Fix_DFU_10_5_6" file like three times before i finally got the enter admin password and reboot, but once it did I can DFU without any problems...

Thanks Volks

Thanks for the tip Volks! Got it back up and running with a reboot of the old system. Now onto give it another shot...

I finally stumbled onto a method through trial and error that worked for me. It worked when the phone was Pwned and when it wasn't.

* Use the OS X 10.5.6 combo update.

* iPhone can be jailbroken, unlocked, and Pwned already or not.

* Use PwnageTool to create your custom firmware, or if you already have your firmware created just have it create a throw away firmware file. When you get to the question "Has your iPhone been Pwned before (does it have the pineapple logo)?" Click "No". Follow the prompts to enter DFU mode.

* iTunes will give error 2001. Unplug the USB cable, then plug it back in. iTunes will give a recovery mode warning. Dismiss this, press the Option key and click the Restore button in iTunes. Select your custom firmware.

I've been able to reproduce this again and again. Nothing else worked: kext swaps, hubs, etc.

That is all... Thanks so much for all of your help!

I had the exactly same issue... How can I fix it by Leopard DVD?
Do I have to make an Archive and Install choice? Will I lose my data (emails and music), since this option asks for only 11Gb free and I have around 50GB of music and stuff?
Thanks for the attention.

I did this on an early MBP 2008 and my wired keyboard, built in keyboard and trackpad are fine. But my bluetooth mighty mouse is having the same problems as others. It says connected, but it won't move. I tried un/re-pairing and no luck. If I shut it off and back on it works for a few moments, then stops again. Anyone figured a way to fix this other than going back to the 10.5.6 text?

Volks, you are a STAR !