I think all the drivers for the mouse where supposed to be added as Bluetooth protocols not via USB so that may be it and I doubt that the battery on the Xoom has enough left over to power USB peripherals they are all probably going to have to be self powering.
Are using a USB org cable? When I plug a mouse in to my cable, it works. I made mine from a micro USB as you can't find them.
sorry xoom auto corrected otg. Otg is a host cable. The cable has pin 5 grounded as the xoom does not do it like a computer would. You can buy the camera connection kit from Motorola or find one in China.
Go to either Amazon.com or ebay.com and search on "OTG cable". You'll be presented with a number of solutions. My choice was a small, roughly 3 to 4 inch cable with a male microUSB on one side and a standard female USB on the other.
But any version goes for less than about $3.