Emacs 18 has some limited X Window System support, but there are problems. Emacs 19 will have amazing mouse and window support. Right now, there are Epoch which is derived from GNU Emacs 18.58 and Lucid GNU Emacs which is derived from an early unreleased version of GNU Emacs 19, both of which have greatly improved mouse and window support. See questions 120 and 121.
The HP unofficial GNU Emacs also has nice mouse support. See question 95.
There are numerous Emacs Lisp packages that have been written to extend Emacs 18's mouse handling capabilities. Some of these packages also have patches to the C code to provide enhanced capabilities. Look up `mouse' in the Lisp Code Directory (see section How do I find a GNU Emacs Lisp package that does XXX?).
There is a package called BAM (Born Again Menus) which provides menus for GNU Emacs via an external C program. It does not provide mouse support in the Emacs window such as scrollbars, cut-and-paste, etc.
NOTE: Epoch only works with the X Window System; it works on ordinary terminals by invoking regular GNU Emacs. Lucid Emacs does not currently work on ordinary terminals, although there are plans to fix this.