Well that sure does answer some things. I am indeed running X version 4. I currently only have a remote connection without X to my linux box so I won't be able to test the previous instructions, but I'll let you know once I get home.
The current configuration is as follows:
Option "Protocol" "PS/2"
Option "Device" "/dev/psaux"
Option "ZAxisMapping" "4 5"
Option "Emulate3Buttons" "no"
I haven't yet administered the protocol change, because as mentioned earlier, I'm not yet able to test it. However, can you see anything else that should be added/changed in the configuration?
On a related subject. What is considered as restarting X? Rebooting the machine of course, but is for example ctrl-alt-backspace considered as restarting X? Thanks for the help so far!