I've used paper, and (various types of) adhesive contact paper. None was pleasant to use: the edges rub against the skin, and the paper gets stretched (!) and filthy shockingly quickly.

Now I sand the surface down a bit and brush on a few light coats of varnish. I used masking tape to define the area the first time, but if I had to do it over again I'd just roughly blend at the edges. The result is a smooth and mouse-compatible surface which thus far has lasted better than the rest of the desktop (and which in any case can always be topped up).

My mousing area still had plenty of visible texture so gloss varnish worked fine, but if the area was smooth enough to confuse a laser mouse I'd use matt or satin varnish instead.