Actually, most old ball mice were optical in nature - the ball moved a horizontal and vertical bar, which had slotted wheels at the ends. Between these were a light source and a receptor - when the mouse was moved, this would cause the slotted wheel to turn, cutting off then allowing the light to pass at a high rate.
As far as the topic goes, I have swapped IR into a mouse and it worked fine. I have also swapped high intensity blue into a few mice, and all worked fine as well. One wireless one in particular would turn the LED off earlier than it would with red, then it'd flicker on / off at .8-2hz or so, so the mouse would seem like it was turning on / off rapidly... if you are doing this to a wireless mouse, this would be my only concern.
And yes, the red LED is reusable (most use a 5mm LED), but why not just buy a package of them for cheap?