The emulated mice should emulate a horizontal wheel when possible. This patch series does that for the USB mouse and tablet and the ExPS/2 mouse. As far as I can tell the vmmouse protocol doesn't handle a horizontal wheel, and I have no idea if emulating a wheel might make sense for any of the other mouse types.
I've tested this using the SDL interface and an Ububtu 10.04 cd image; xev reports the correct events for all three devices, and a gedit window with sufficient text to create scrollbars scrolls correctly with both mice (didn't test the tablet). More testing would be good. See also Debian bug #579968.[1] [1] http://bugs.debian.org/579968
