Comment 5 for bug 94597

The issue seems to stem from changes made, way back when, to how udev parses it's .rules files. The effect of this is that the /etc/udev/logitechmouse.rules file supplied with Ubuntu (including Hardy) is basically ignored by udev.
Attached is my modification to said file (as supplied by Hardy), which sets the group for the relevant node within /dev/bus/usb/ to plugdev. Replacing the ubuntu-supplied file, doing `sudo udevcontrol reload_rules`, and re-plugging your mouse should activate it.

With this all in place I can now use logitech_applet (it's in the repos) to view and set the resolution, etc as a normal user.
*However* there still seems to be a bug in the admin interface, as changing the resolution of the mouse works only once. After applying a new resolution, the same error message as originally encountered appears and any further attempts to apply changes seem to have no effect. Closing and reopening the settings window resets the behaviour, allowing another - single - alteration.