I worked with HP on this issue and we determined that it wasn't a hardware

The issue is this, during the install mouse function is limited to
scrolling. The mouse can not select any of the radio buttons on the first
accept license screen and therefore the install cannot proceed.
Interestingly the mouse had full function using SLES 10sp1 disks. The
checksum on the image was correct and a new DVD was made from the iso with
the same results.

Any clues?