FINAL EDIT - This issue has been solved! See reply #5 by djinni69
I keep running into a very strange issue with Input.GetAxis(“Mouse X”) as well as Input.GetAxis(“Mouse Y”). In some of my Unity projects (Unity 3), the function returns information properly. However, in my latest project, this function worked for a little while, and then suddenly stopped returning values when the mouse is moved.
I’ve tried using different models, different prefabs, checking for script compilation errors (none), rebuilding the entire project from scratch, as well as reviewing the Input Manager settings, but nothing seems to fix this very annoying issue. Mouse clicks are detected by the gui perfectly fine, however. The issue centers on detecting mouse movement.
Strangely enough, I can fire up other projects which use MouseLook.js and the GetAxis function, and they work just fine. This fact originally led me to think there was something amiss with my player prefab and the scripts attached to it. However, as I’ve said, I have used multiple meshes, prefabs and none of them seem to pull the mouse deltas. I’ve confirmed that the GetAxis functions return 0 using debug logging, too.
Has anyone else seen this weird behavior?
EDIT - Please be aware that my claim where I fire up other projects using MouseLook.js and they work just fine, is incorrect! I verified that this morning (10/4/2010). No projects which were created from scratch in U3 or upgraded from 2.6.1 get input from the mouse using GetAxis.
Seems to me like there is an issue with the input preferences. Maybe the name of the input got changed or the sensitivity got turned to zero?
The preferences look correct, and match the other projects where GetAxis is able to retrieve the correct Mouse Deltas. I’m almost to the point of uninstalling 3.0 and reinstalling it
Reinstalling U3 didn’t help 
I’m at a total loss. Any other ideas, gang?
Back at troubleshooting this issue after taking the weekend off, and I’ve found that all projects are no longer recieving mouse information from GetAxis. I’ve rebooted my machine repeatedly to ensure something loaded in memory wasn’t the culprit, and I’ve reinstalled Unity3 many times (without deleting the existing file structure). Nothing has worked so far. I’ve even taken projects which worked in Untiy 2.6.1 and upgraded them to Unity3. Even these 2.6.1 projects, where I know 100% the mouse is working in 2.6.1, do not function properly in U3 with regards to GetAxis and the mouse.
I’ve now reverted back to Unity 2.6.1, deleting everything that was associated with U3, and my projects are now working as expected. I am now 100% sure that something with U3 caused this issue, but I have absolutely no idea where to look. I was considering reinstalling U3 now that I’ve completely wiped out my previous install, but that won’t happen until tonight. Any Unity Devs out there with possible insight into my issue? Thanks 
EPIC FACEPALM
My issue is solved. The entire problem was rotating bones dynamically using the mouse, while animations were playing. I didn’t make this connection until I started stripping components off my prefab. I removed the animations, and the mouselook began working as expected. In the end, I changed the canned mouse look to do it’s functionality in LateUpdate rather than Update, and the animations began playing nicely with my mouse-driven rotation.
I also realize that some of the prefabs I were testing in Unity 2.6.1 were not exactly the same as the ones I was using in U3, setup-wise. I wasn’t consistently testing the same problem by swapping out prefabs and meshes for others. Some prefabs had cameras and mouselook.js parented differently than the prefab that was causing my initial grief. For example, in the 2.6.1 prefab, cameras were parented to the root gameobject, whereas in U3, the camera was parented to the rigging. That was a HUGE difference that I failed to recognize, but the lesson was learned hardcore on that one! If I want to manipulate bones dynamically, use LateUpdate or spend many a-late night troubleshooting 
Sweeeeeeeeet