Just downloaded Milestone 7

Read Bugs:Most Annoying Bugs 11.2 dev - openSUSE

External USB keyboard and mouse does not work either.

Yaaaayyyyyyyyyyy!! I fixed it, just booted into runlevel 3 loaded yast2, and installed updated version of HAL.

yer the most annoying bugs has a fix for the k+m thingy

If the DVD image flops, try the live CD image instead (especially if you prefer KDE); for some reason, the KDE-based live CD image does not have the HALD bug known to exist in the M7 DVD image. I not only have a USB keyboard and mouse, but both are wireless, and of different brands (keyboard is Microsoft Wireless 6000 V3, mouse is Logitech V220). Neither has any issue whatever with the live CD (either booting from the image or an install from the image). The system boots faster, uses far fewer lines (despite greater hardweare support)