Use a decent (not recent, but that might help, too) OS.
But since this probably won't help you, here're some ideas:
Are you using an USB mouse (probably)? If so, have you tried plugging it into another USB port?
Have you tried another mouse? Are other USB devices working?
As for the panel not being at the bottom:
Just move your mouse pointer (once you got the mouse or touchpad sorted out) onto the panel, click and hold left, and drag it wherever you want it (bottom probably). It is sometimes a bit reluctant, but it should work (at least worked in WinXP, which was the last win I used, but I'm sure Vista and 7 are just the same.
If you don't depend on any windows programmes I recommend trying Linux.
This one is quite nice. Download it, burn it to a CD, boot from CD and you can try it out without installing it.