A little bit closer. I really want to get bluetooth mouse working. A cheap bluetooth mouse can be bought for approx 8 pounds / 10 dollars. It would be good for Quake3/Duke3D/OpenArena.

Here are my findings:
Install the bluez packages for Maemo.

Go into /etc/bluetooth/main.conf
Find the DisablePlugins line and change it so that "input" isn't in it.
Restart bluetooth service.
stop bluetoothd
start bluetoothd

Find and download Ubuntu bluez-compat armel deb package
Open the deb archive and remove the "hidd" arm binary.
Copy the binary to the N900 (i.e. to /home/user ).

Click on the "discoverable" button on the bluetooth mouse.
Go into N900 bluetooth settings, and set it active.
Within N900 bluetooth settings, add new device and pair with the mouse (key 0000 usually)
On the xterm, run:
hcitool scan
You should see the mouse and its mac address.
If you don't then click the button on the mouse to put it into discoverable mode again.

On the command line, run the following:
./hidd --search

This searches for and connects to the bluetooth mouse.
Once connected the white bluetooth symbol on the desktop goes blue.

Certain applications respond to the mouse, although there is a major
sensitivity issue.

You can activate a mouse icon in the web browser by swiping left-right.
Vulture's Eye game responds to mouse. Probably others too.

There is a problem with mouse sensitivity. The mouse icon goes up to the
top left corner or disappears. Using the touch screen sometimes brings the
mouse icon back.

So.... the sensitivity issue needs resolving.
Also.... why isn't "hidd" binary in bluez packages?
I would have expected it to appear in maemo-bluez-compat

Hope other people can take this forward. (I'm no expert).