I just tried out 2.6.11 and had something similar happen.
Apparantly (according to the changelog) the alps touchpad driver was added to kernel mainstream. If you check dmesg, you might see something about it. Mine alerted me that the alps pad was detected, the driver was loaded, and that 'hardware tapping' was disabled... I tried to hack out the driver to go back to generic, but was unsuccessful.
I'm back on 2.6.10 to get back the old functionality.