My mousewheel was working in kernel 2.4 but when I upgraded to 2.6 it stopped working. Middle-click still works though... how do I fix this?

I had the same problem - I didn't know the middle button still worked.

Did you compile PS/2 mouse support in or as a module?

I think this problem occurs only with the module psmouse, but I'm not sure - I wouldn't recompile if it takes ages - I've got it working with 2.6.6, but I've got problems of my own.

I've got (not 100% cert as I'm in Windows atm):

Input Devices
<*> PS/2 Mouse Support
<*> PS/2 Mouse Support /dev/psaux by default

and a couple of others in the same place that say they are required for PS/2 devices.

Not very helpful I know, but at least I know I'm not alone.

There's something with "/dev/psaux by default" there? I can't find anything like that. But PS/2 Mouse is enabled. Your mouse wheel works?

In actual fact I found my mouse didn't work altogether. Do you have

ZAxisMapping "4 5"

or something like that in you mouse section of /etc/X11/XF86Config-4?

Perhaps 2.6 needs this and 2.4 doesn't.

Yes I do have that.

Identifier "Mouse1"
Driver "mouse"
Option "Protocol" "PS/2"
Option "Device" "/dev/mouse"
Option "ZAxisMapping" "4 5"

Try:

Option "Protocol" "IMPS/2"

I have tried that and it didn't help
But today I was searching and I found the solution.

Identifier "Mouse1"
Driver "mouse"
Option "SendCoreEvents" "true"
Option "Device" "/dev/psaux"
Option "Protocol" "IMPS/2"
Option "ZAxisMapping" "4 5"

works perfect.