Trackpad Issues - Should I let them prevent me from upgrading to Yosemite? My MacBook (Retina, Mid 2012) currently has issues with its trackpad based on water damage earlier in the year - from time to time, the mouse pointer flicks around uncontrollably (although at other times, it's fine). I know I can probably get it fixed, that's another long story outside the scope of this question - assume it's unfixable for now.

Currently I have 10.9 (Mavericks) installed. I use an external USB mouse on a day-to-day basis, with the "Ignore built-in trackpad when mouse or wireless trackpad is present" option ticked, which prevents the flicking mouse pointer behaviour.

I am considering upgrading to 10.10 (Yosemite), but I've been putting it off for sometime, because I'm concerned there may be a phase during the install where USB devices are disabled and/or my external mouse might be unavailable. As well as being unable to use the mouse, this might unintentionally mean that I "click" the mouse pointer and press something with a serious impact.

Are my fears founded? Are there phases of the upgrade where I can't use a USB mouse?
Your fears are unfounded, although kudos to you for being so conscientious about the unique circumstances of your machine before attempting to upgrade. In any case, consider an iMac or Mac Pro which must have an external mouse, there is no internal pointing device. You'll be fine as far as a USB pointing device goes as long as the mouse you're using did not require any special drivers when you first began using it.