I faced this problem a couple of times in Ubuntu 12.04 with my ASUS K53S laptop. The touchpad stopped working but the mouse attached to USB port was working fine.
I came across a simple conjugated command to fix this and make your device running properly again without having to reboot or do anything else.
Open the terminal and type in:
sudo rmmod psmouse && sudo modprobe psmouse
And there you go you’ve fixed your Linux Box once again.