I'm not having this trouble with the live Xubuntu usb. The setting takes effect as soon as soon as I click left-handed. Forgive me for asking, but just to cover all possibilities, are you sure it's not working? Have you tried clicking around?
The setting in Mouse and Touchpad can be overridden by settings in Settings Manager > Settings > Other (Scroll to the bottom) > Settings Editor
In the Settings Editor, choose Pointers under the Channel pane. You should see your mouse listed. You may have to expand the drop-down arrow, but you should see a Property named RightHanded and two check boxes: Locked and Value. Make sure these are both unchecked.
If this takes care of it for you, keep in mind that the left-handed setting is just for the live environment. You will still need to set the mouse to left-handed after installing.
If this does not take care of it, I wonder if there is a compatibility problem with your mouse. Please edit you question to include to kind of mouse you are usinge