It does, as always there are some caveats; I've never personally configured it, but I'm sure someone has, the ISboxer/Inner space community is fairly helpful:
http://isboxer.com/index.php/guides/22-using-multiple-computers
There are also Vetra's that broadcast USB devices, including mice I believe; though they are fairly expensive.
http://www.vetra.com/wow.html
Regarding legality of Powershell, the important thing the 1 keypress 1 action thing, at least for WoW. So, it'd probably depend on what you did with it. I'm not really familiar with it, though.
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