After upgrading from Ubuntu 14.04 to 14.10, I am no longer able to use my keyboard and mouse to do anything. I can't even get to a tty terminal. All I can do is stare at the login screen, or do a hard reset.
I suspect the Linux kernel 3.16 because my keyboard and mouse work again after booting into an older kernel version from Grub's 'Advanced Ubuntu Options' page.
My computer is a custom built PC with an AMD chip-set and USB 2.0 and 3.0. (Built around the first of October 2014)
Edit: My keyboard is a USB HP keyboard from another computer, my mouse is a USB wireless Logitech mouse with unifying receiver.
Edit2: Clarified information about not being able to use keyboard or mouse to do anything.
I had the same issue - for some reason, during the upgrade, my kernel was skipped so I manually upgraded/installed linux-image-3.16.0-24-generic. It turns out most of the drivers you need live in linux-image-extra-3.16.0-24-generic and you'll need the headers too. I'm guessing you're missing them as I was.
So, from your working kernel:
Afterwards you should be able to boot into 3.16 and your peripherals will work as expected.
I kind of had the same issue after upgrading. But I could get to tty and by accident found out that GNOME Do was the application to blame for that the keyboard (and mouse) stopped working.