I've tried installing Litestep (three installers: omar, ru and losi) on three different computers numerous times during last six months, running windows xp sp2, windows xp sp1, windows xp (no sp) and windows 2003, but all hung after the restart. The last time I've tried installing it, LOSI installer, after finishing the installation, exited explorer and loaded litestep - it worked. But after I restarted the computer, it hung again.
When windows starts, I see the new Litestep desktop, and nothing happens, even the mouse does not move. When I do ctrl+alt+del, mouse suddenly starts to work. Then I choose to run Litestep from task manager, it loads litestep taskbar and other things, but I cannot work with them - they just don't react when I click on them, no menus open and so on - the application is hung. Although I can run anything from the task manager.

The computers I tried it with where Coreduo, Pentium III, Pentium M; tried only usb mouses, but connected both to usb and to ps2 (with ps2 adapter) and the mouse in the notebook computer.

What I should do for the Litestep to work? I don't think the mouse is the problem - the litestep does not respond at all.

It sounds like one of the programs that you are loading during startup expects explorer to be the shell. To resolve the issue you need to systematically go through, disabling one at a time, and find out which one it is and then work with the application owner. Other than that older versions of LS were known to do that with XP and a simple build update would resolve the issue; however, this option was covered already by using the LOSI installer.