As it's my design, I'll answer this: It emulates an AMX mouse, so yes, it's fully recognised by SymbOS and any other software that supported AMX mice. You don't need a custom power supply, but you do need to feed it with 5V. The Red/Black wires are there for this reason. Not sure about the device on offer, but most users had a plug / socket on the end of this wire so that it could be plugged between the CPCs PSU and the CPC power socket.
Bryce.