KVM switch works well, and of course you don't HAVE to connect the keyboard and mouse to it(well, unless it's one of those that you switch comps with a keyboard command )
I actually have two inputs on my LCD(VGA and DVI) and that's my makeshift switch. If I want my mac, I switch to DVI, if I want my Compaq, VGA...
if you have both input in your monitor already and it sound's like it's working, are you trying to do something more than having both computers in the same monitor. Perhaps you want to use DVI with both. Let us know