All the real work is done by the VT82C42. The 74HCT688 provides the needed chip select for I/O ports 0x60 and 0x64 (as per the PC so it can be used with the RC2014 80C188 card). The 74LS06 is used for the output drivers on the controller. The spare gates are then used to drive the two interrupts onto the RC2014 interrupt line.
There are numerous pinouts for brand name PS/2 connectors but all the cheap generic ones appear to use the same pinout. Do check the pinout of the parts you are using. If it's the cheap Chinese purple ones off e-bay you should be fine.
There is software support for it in Fuzix as of today, including the PS/2 mouse.
From a software perspective the only oddity is the lack of two interrupts. The VT82C42 status byte will however report 0x20 if a mouse code is the next byte to read, or 0x01 if something else is ready. The 0x20 bit is cleared by any second read of the status so you have to be careful not to re-read the status in the interrupt handler.