I first saw this idea online and knew I had to do it myself.
There are quite a lot of things to do with an old NES controller but none are perhaps as useful as an optical mouse. The first step was to buy an old NES mouse off of ebay. I got this one for $3.
Once open, the controller is very simple on the inside.
At a local computer store that specializes in older computers parts I picked up a 3m joystick mouse. It has left, right and scroll-lock buttons but no scroll wheel.
After disassembling the mouse here is what I am left with in comparison to the NES controller
I cut off the original circuitry that was behind the d-pad. Then I scraped off the coating over the copper trace on the pcb board. On the mouse I cut off its 3 buttons and soldered the wires directly to the traces. So now the controls are Down = left click, Up = right click, and Left = scroll lock. I also added some foam to make the whole thing feel solid.
And here is the mouse in action, you can see that left and right click are still left and right (or up and down on the controller). It works great actually.
This is the only hole I had to cut in the case, it is for the optical sensor. I just copied the hole that was in the old 3M mouse.