That one kicked my butt for the better part of a year (or longer - I had more important cats to skin), until I determined that it was the wrong mouse driver (ps/2 driver apparently does not support the mouse wheel).
I had googled all the possible websites dealing with this - and not one came out and made that statement (at the time). I ended up deciding to duplicate the example configs specifically --- and the system bitched about not being able to find the 'imps/2' mouse driver. I went into the XF86config file and made the change to the mouse driver specification - and BAM! It started working - and a lightbulb went on over my head.
Sometimes it takes more than RTFM to figure out a problem.