Holy jumpins, just looked at some 2-4x PC KVMs, and cripes they're expensive. I always figured these things would just be a simple cheap-to-make input tunneler, guess I was wrong.
If it's a PS/2 model there's also extra circuitry to make it safe to hot-swap mice -- many people don't realize it, but PS/2 connectors aren't suitable for hot-swapping. If you change mice with your computer turned on, there's a real possibility that you'll fry your onboard PS/2 controller. (I've seen this happen myself on multiple occasions over the years)
USB is definitely more involved than just a cable extension.
but anyway -- if you look around you can get a dual VGA-based KVM in the $30-$40 range. DVI will be several times that.
Another thing to consider: since your monitor has both DVI and VGA connectors, you may be able to hook up both devices directly, and use the monitor controls themselves to switch between inputs. At least you wouldn't need to manually switch cables -- although don't count on this working without actually trying it or checking with the technical support of your monitor manufacturer: My own LCD has the annoying habbit of auto-detecting the ports. the DVI connector is fine, but if you're watching the VGA input then the screen will blank out for a second every 10 seconds or so if there is also a DVI cable connected