How feasible is it to make a laser mouse with Arduino? Can Arduino simulate several mouse buttons? Left, right, middle, and lateral buttons?
It is quite feasible, but the answer depends on the choice of Arduino. Do you have one already or are you looking for suggestions?
The Teesy would be the best choice as you can change the board to act like a mouse in the IDE. http://www.pjrc.com/teensy/td_mouse.html It is also possible with other Arduinos (like the current Uno) that don't use an FTDI chip to handle the USB, but it is a bit more complicated.
I assume you have some method for sensing movement in mind. I don't know if you would be able to recreate a laser mouse very well, but a ball mouse or a mouse that used some other way of sensing motion would be quite doable.
Keyboard & mouse emulation with the Leonardo. Doesn't anyone search before asking or answering?