Demo Video:
I check SparkFun's new products pretty often and spotted the ADNS2610 optical mouse sensor. The datasheet shows that it's easy to use, just read the delta-X and delta-Y movements, and it can also provide a 18x18 pixel greyscale image.
It involves using V-USB on the USnooBie to provide the AVR microcontroller with USB capability, some example code from SparkFun to read data from the ADNS2610 sensor, and a C# Windows application using LibUsbDotNet to read data from USnooBie to display the picture provided by the optical sensor.
Project file downloads, relevant links and resources are found here: