Here is the issue.
I upgraded a HP p7-1235 to windows 8 in december and everything worked until an automatic windows update happened on March14 2013 and since then the keyboard and mouse are not working. I called HP as my system is still under warranty and they replaced the mother board on the system. Still the issue exists. Keyboard is being detected in the bios but not after booting into windows 8 (It boots into metro screen or the home screen what ever you call it). Finally HP is saying that the issue is with WINDOWS 8. I called Microsoft and they tried telling me in different ways on how this is not a windows8 problem and I should buy a new USB device and plug my keyboard and mouse into it and blah blah blah...... It looks like I am totally screwed now as I bought the windows 8 and upgraded myself. System came with Win7 and HP is blaming it on windows 8.
The problem is not any else where.... it is in windows 8. Microsoft, please fix this issue as soon as possible.
Update: I tried restoring to 3 of the previous restore points and it complains that it cannot restore as some thing is corrupted.