It's an odd concept, but a great novelty idea for a Christmas present. We decided it was a mouse and a phone in the end, after much deliberation.
The mouse part of the device is a fairly standard PS/2 version, but it doesn't have a scroll wheel. Once you've used a rodent with a wheel, you won't want to go back, so we wouldn't buy the MousePhone on this point alone.
Construction is excellent: it feels quite heavy, so it's easy to make accurate pointer movements on screen. As for the phone, we liked the small rubber buttons and the dial/answer button was suitably recessed to prevent it being pressed during 'mouse' usage.
Apart from feeling and looking like a fool as you're holding the mouse up to the side of your head, the sound quality is poor and you obviously can't use the mouse for navigation while you're talking. Fortunately, the hands-free kit that plugs into a minijack socket on the side of the mouse neatly solved these problems, giving sound quality near that of a normal phone.
The MousePhone is nothing but a gimmick, and the price tag of 40 UKP is a little excessive. But if you're the gadget type, this could be the perfect addition to your collection.