Comment 7 for bug 327428

nxmehta - I don't recall all of the finer details, but what I do remember is this:

https://launchpad.net/ubuntu/+source/xfree86-driver-synaptics/0.15.2-0ubuntu8

choose your build (probably i386, as mine is, or amd64, as with botlobsta), and download the deb. Uninstall the current xserver-xorg-input-synaptics if you currently have it installed, then install the aforementioned deb file. It will show up in synaptics as xserver-xorg-input-synaptics. You will undoubtedly want to select "Lock Version" on it once it's installed, otherwise it will constantly bug you to update to the current, broken version.

There are more steps to get it working really well, most involving setting up the .fdi file so that HAL makes the touchpad behave the way that you want - the first thing you'll probably want to change is the speed of the mouse.

Meanwhile, I looked through what I could of the source code and the diff for the 0.99.3 version, but was entirely unable to see anything hinting at why this problem exists at all. But then, it's probably really obvious, and I just don't see it due to lack of experience.