That's right, ZAxisMapping deals with the wheel. However the protocol might be troublesome. I had a usb-connected wireless mouse (the wireless receiver was usb-connected, mouse itself wireless) which worked, but I never got the wheel scroll work with it. On this laptop I have a regular usb laser mouse, and it works well. Below is a snipplet from my xorg.conf (mouse device section), which I had to alter a little (red coloured parts are those I changed) to get the wheel work.
Code:
Identifier "Mouse1"
Driver "mouse"
Option "ZAxisMapping" "4 5"
Option "Protocol" "Auto"
Option "Device" "/dev/mouse"
It's Slackware 12.0, forgot to mention. ZAxisMapping was missing so I added it, after which I had to change the Protocol to Auto to get it work.