Hi, Dawnsboy, looks like we are alone on this one... I was looking around on this. I think you have some options.
1- May be there is some option in the kernel config to avoid the bios override. If there is something like that (may be one of our kernel gurus wants to jump in) I think is the better option. If this is not possible, lets go to number 2.
2- Downgrade to a lower kernel. Since your machine has some years, I think you dont lose too much but less boot time, may be. If the newer kernels didnt solve a problem for you, I think this is a choice.
3. Since you want to disable the touchpad for ever and ever, that should be easy. We need to find something like a kernel module for it and put it in the blacklist, or comment the proper xorg.conf section.
You want to plug your ps/2 mouse and automagically disable the trackball... I dont think this can be done. May be finding a way to disable the trackball at a software level, make a script and then launch the script with an udev rule when the mouse is plugged. I dont know if something like that can be done, and the two first options seem more doable.
Ok, looks like I am not being very helpful, but is a start
may be this bring ideas to others...