This is filed as an XFree86 bug.  Scrollwheel mice work fine in XFree86,
so there is no XFree86 bug here.

Red Hat Linux has always configured the XF86Config config file to have:

ZaxisMapping "4 5"

by default, regardless of the mouse type used.  The option enables scroll
wheel support on most mice - if they have scroll wheels, and the proper
mouse protocol is chosen during install/configuration.

Most scroll wheel mice, and in fact most modern mice period use the IMPS/2
mouse protocol, however not all mice do, so it is not a safe assumption
to pick.

There is no way in Linux or XFree86 to currently autodetect what mouse
protocol is required or supported by a given mouse.  As such, end users
need to manually choose their mouse type.  There is no getting around
this, and there wont be likely for some time, probably not until
XFree86 5.0 or so.

As for making a default configuration for scroll wheel mice, users should
choose their mouse type from the existing list.  I'm not sure how it
could be made much better than it is right now, without creating
a database of individual company/device/model types and tying them
to a particular mouse protocol and configuration settings.

Such a mouse database is not a bad idea per se. but it is also not
something to be implemented overnight.  This is something which could
be considered for a future version of the OS and its config tools however.

I'm reassigning it to our new config tool where it can be examined
in a future Red Hat Linux release.

I know its not an XFree bug, I'm sorry for filing it as such.  I didn't see the
option for redhat-config-xfree86.  I've checked my XF86Config, and the problem
actually isn't ZAxismapping, its the protocol used: PS/2 instead of IMPS/2. 
Actually, there are two entries, looks like the first for 'Mouse0' is supposed
to be for non-devfs with device /dev/psaux, and the second Mouse1 is for devfs
with device /dev/input/mice (just a geuss about the reason).  Mouse1 has IMPS/2
protocol, but Mouse0 does not.  Once again sorry for the mis-filing.

Are you saying you have an IMPS/2, but it probed as a PS/2?

What program wrote the config? The installer?

ping?

Although the setting is in the XF86Config file, this is really a
redhat-config-mouse issue since that program edits the mouse section of the
XF86Config file, as well as the /etc/sysconfig/mouse file for console mouse
configuration.  I'm changing the component to redhat-config-mouse.

I have made some changes to redhat-config-mouse yesterday that should ensure
that ZAxisMapping always gets written to the default pointing device. 
redhat-config-mouse-1.0.2-8 in Rawhide should resolve the problem, so I'm
closing as Rawhide.  QA, please verify.